The UK’s Financial Conduct Authority released a new set of crypto marketing rules to take effect on October 8.
On Thursday, the UK’s Financial Conduct Authority (FCA) unveiled stricter marketing rules. The new guidelines, set to come into force on October 8, introduces a “cooling-off” period for crypto buyers and scraps “refer a friend” bonuses.
The regulator said in a press release:
The new rules mean crypto firms must ensure that people have the appropriate knowledge and experience to invest in crypto.
Incentive Bonuses Scrapped
The UK’s financial watchdog is taking a closer look at its crypto marketing rules introducing a more comprehensive guideline to protect investors.
In a bid to discourage impulsive crypto purchases, the FCA’s new rules require first-time crypto investors to wait out a 24-hour “cooling-off” period after registering trading accounts.
Sheldon Mills, Executive Director of the FCA’s Consumers and Competition Division, said:
It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision.
Consumers should still be aware that crypto remains largely unregulated and high risk.
The regulator further said that “refer a friend” incentive bonuses for crypto buyers would be done away with. It added institutions promoting crypto assets would have to introduce clear risk warnings and ensure that advertisements are transparent, fair, and not misleading.
The agency said crypto firms would have to carry warnings stating, for instance:
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.
UK Looks To Regulate Crypto Sector
Regulators worldwide are working relentlessly to introduce frameworks to govern the crypto sector to mitigate the risk to investors and economic stability. The European Union (EU) has taken charge in this respect with its landmark Markets in Crypto Asset (MiCA) regulation. The bill underwent its last vote late in May and is set to take effect in phases in 2024.
The UK Treasury Committee recently released a report compelling the government to regulate retail crypto trading not as financial assets but as gambling instruments. The committee argued that fraudsters and money launderers’ potential use of crypto threatens consumers and economic stability.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.