Stock lending (for short selling) is not considered a security, it is considered lending. Most cryptocurrencies aren't even considered securities by the SEC...only a handful of tokens. It would be reasonable to expect a similar treatment here.
Exactly. The same goes for margin accounts. I can see both the FDIC and FINRA having a claim to regulate these crypto lending accounts...the SEC is the last that I would expect to do so. The fact that they're trying to classify something that can't even be traded as a security is mind boggling.
You’re thinking of something else. FINRA is a non-profit self-regulating organisation. It has no power over anyone who doesn’t voluntarily submit to its rules. It is not a part of the government.
The SEC was created by the Securities Exchange Act of 1934. It regulates FINRA [1].
The regulator the SEC has constant turf battles with is the CFTC [2].
> You’re thinking of something else. FINRA is a non-profit self-regulating organisation. It has no power over anyone who doesn’t voluntarily submit to its rules. It is not a part of the government.
Financial industry participants are required by the SEC to submit to its rules and regulatory authority. You literally cannot create a financial institution without being forced to submit to FINRA.
> You literally cannot create a financial institution without being forced to submit to FINRA
Yes, you can. To trade securities you have to be a member of an SRO, of which FINRA is one and the largest. (MSRB is another. Before 2007 there were non-NASD NYSE members. And if you're starting a bank or a hedge fund or a VC firm, FINRA has nothing to do with you.)
Going back to the original assertion: yes, FINRA was created by and is subservient to the SEC. If FINRA has proper jurisdiction, the SEC certainly does.
