UK sets deadline for crypto industry to tackle misleading ads or face severe penalties
In a bid to regulate the communication of information regarding crypto-related products, the Financial Conduct Authority (FCA) has introduced new rules that specifically target companies operating in the United Kingdom.
This directive, as stated in a notice released on July 4, encompasses various digital platforms, including websites, apps, social media, and online advertisements.
Leveling the playing field
In the July 4 announcement, the Financial Conduct Authority (FCA), the regulatory authority overseeing the implementation of the new regime, has set a stringent deadline of August 4 for crypto firms to respond.
The FCA expects these businesses to provide a detailed account of the specific steps they intend to take in order to adapt and prepare for the regulatory framework.
The FCA’s objective with these rules is to ensure that crypto businesses maintain transparency and provide accurate information to consumers. By extending the compliance requirements to foreign-based companies, the regulatory body aims to create a level playing field and protect individuals within the UK from misleading or deceptive advertising practices.
The new guidelines represent a step towards regulating the crypto industry in the UK, as the FCA recognizes the importance of effectively monitoring and supervising the communication channels through which crypto-related products are promoted. Companies operating in this space now face the task of adapting their advertising strategies and materials to meet the regulatory standards set forth by the FCA.
The FCA has issued a stern warning to companies engaging in the unlawful promotion of cryptocurrencies to consumers in the UK, emphasizing that strict measures will be taken against offenders, including the possibility of imprisonment for up to two years, significant fines without limits, or both.
To ensure compliance, the regulator expects companies and individual promoters to register under the Money Laundering and Terrorist Financing Regulations, a process that entails a registration fee and a potential wait time of up to three months for approval.
Increasing regulation
This announcement comes at the same time as the release of the Financial Services and Markets Bill, which grants regulators the authority to oversee cryptocurrencies and stablecoins, received royal assent from King Charles last Thursday, finalizing the legislative process and officially making the bill law.
This procedural step solidifies the Financial Services and Markets Act and includes provisions to bring cryptocurrencies and stablecoins under regulatory supervision. The bill had previously gained approval from the upper chamber of Parliament last week.
