Washington, D.C., partner Emily Gordy, former senior vice president of the Enforcement Division of Financial Industry Regulatory Authority, commented in an Aug. 14 Compliance Reporter story about a suit filed against a bank and brokerage firm by an employee claiming he was terminated for “his bitcoin mining activities.”
In the article, Gordy noted financial institutions’ duty to assess employee activity involving the offering or sale of a security and that cryptocurrency in particular could create regulatory risks for the firm.
“It implicates their supervisory obligations — the firm has to be able to supervise that activity and in order to do that they have to fully understand it,” Gordy said.
She added, “Until firms fully have their heads around what the product is and what the risks are I think it is appropriate for firms to put limitations or prohibitions on [employees’] ability to engage in this.”