In a significant move to regulate the rapidly evolving cryptocurrency market, the UK’s Financial Conduct Authority (FCA) issued 146 alerts related to cryptoasset promotions within the first 24 hours of implementing its new crypto marketing regime.

This action underscores the regulator’s commitment to ensuring that the crypto industry adheres to the same standards as other financial sectors.

The FCA’s new regulations, which came into effect on October 8, 2023, mandate that any firm wishing to promote cryptoassets in the UK must either be authorized or registered by the FCA. Alternatively, their marketing activities must be approved by an authorized entity. These regulations apply to all firms marketing cryptoassets to UK consumers, irrespective of the firm’s location or the technology used for promotion.

Under the FCA’s guidelines, promotions must be clear, fair, and devoid of misleading information. They should also prominently display risk warnings.

Furthermore, these promotions should not unduly incentivize individuals to invest. The FCA’s stance aligns cryptoassets with other high-risk investments, ensuring that potential investors are fully aware of the risks involved.

The FCA has emphasized the role of businesses in this regulatory framework. It expects entities such as social media platforms, app stores, search engines, domain name registrars, and payment firms to consider the alerts issued and play a proactive role in safeguarding UK consumers from illegal promotions.

The regulator has also introduced a “Warning List” to aid consumers in identifying firms whose promotions might be flouting the law. This list will be updated continually, flagging firms that might be communicating cryptoasset promotions illegally or those not engaging constructively with the FCA.

In a related development, prominent crypto exchanges Huobi and KuCoin were among several digital asset companies added to the FCA’s warning list. These firms were flagged for marketing their services in the UK without the necessary approvals.

Both exchanges responded to these allegations, with Huobi clarifying that it does not operate or market its services in the UK. Similarly, KuCoin stated that while it doesn’t operate in the UK, it is committed to adjusting its services to comply with the legal requirements of various countries.

The FCA’s regulations have expanded to include cryptoasset service providers, irrespective of their geographical location. All crypto platforms are now mandated to display clear risk warnings to UK-based consumers. They must also adhere to higher technical standards, which include a 24-hour cooling-off period for new customers.

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Filed under: Bitcoin - @ October 10, 2023 1:20 pm