UK regulators to set new rules for crypto ads
The United Kingdom’s Financial Conduct Authority (FCA) informed crypto companies targeting U.K. investors to prepare for an incoming regulation regarding cryptocurrency promotions.
In an official press release on Feb. 6, 2023, the FCA said companies operating within the U.K. and outside the country will be made to comply with the new crypto advertising rules.
The FCA stated that crypto assets promotion to U.K. customers must follow four routes: an FCA-authorized person must do such adverts, the regulator must approve an unauthorized person. A crypto firm promoting a product must be registered with the FCA under the MLRs.
Also, the FCA will allow a promotion that meets the criteria for exemption under the Financial Promotion Order.
The financial regulator further stated that companies that possess only “Electronic Money Regulations or the Payment Services Regulations” are not authorized persons and as such, cannot carry out any advertisement.
“Cryptoasset businesses marketing to UK consumers, including firms based overseas, must get ready for this regime. Acting now will help ensure they can continue to legally promote to UK consumers. We encourage firms to take all necessary advice as part of their preparations.”
UK FCA.
However, the FCA warned that firms that conduct crypto promotions without going through any of the regulator’s four routes could run the risk of serving a two-year prison sentence.
Meanwhile, a policy statement published by the government on Feb. 1, 2023, on the proposed crypto promotional regime intends to shorten the new rule’s implementation from six months to four months.
The United Kingdom has maintained a strict stance on cryptocurrency advert, with the country’s Advertising Standards Authority (ASA) issuing several enforcement actions against companies allegedly misleading consumers with their promotions.
Outside the U.K., regulatory watchdogs in Thailand and the United States are also focused on curbing false crypto adverts to protect investors.
