The UK Financial Conduct Authority (FCA) is going to introduce tougher rules for the marketing of crypto assets, designed to ensure those who buy crypto understand the risk
Starting 8 October 2023, British Financial Conduct Authority (FCA) will oblige those firms marketing crypto assets to UK consumers to adhere to much stricter rules.
To begin with, companies advertising crypto will need to introduce a 24-hour cooling-off period for first time investors. In addition, friend referral bonuses will be banned.
Overall, the new package of measures aims to ensure that investors have all the appropriate knowledge and experience to deal with crypto assets. Therefore, crypto promoters must place clear risk warnings and ensure their ads are clear, fair and not misleading.
The main goal is to give crypto enthusiasts enough time and information about possible risks to make an informed investment decision.
An example of clear risk warning provided by FCA sounds as following: “Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.”
Recent research from the FCA shows that the estimated crypto ownership has more than doubled from 2021 to 2022, as about 10% of the 2,000 people surveyed stated that they owned crypto. However, Sheldon Mills, Executive Director of Consumers and Competition at FCA, also notes that many investors regret making a hasty decision.
The regulator introduced these measures after government updated legislation brought crypto promotions into the FCA’s responsibility.
Although new crypto regulations are consistent with the rules earlier introduced by the FCA to address misleading financial advertisements of high-risk investments, the regulator is going to prepare additional guidance for the crypto sector to help them meet legal expectations.
The institution will provide consultations with industry players and stakeholders until August 10 in order to form the comprehensible guidance.
