The United Kingdom FCA (Financial Conduct Authority) will announce new strict regulations on crypto ads pending final amendments into the industry’s laws. In general, cryptocurrency will fall under the restricted mass market investments act, which demands a promotion or advert to feature clear risk warnings. The bill will also ban incentives for investing in options like ‘new joiner bonuses’ & ‘refer a friend.’
In any case, these new rules will incorporate crypto in the UK-regulated financial activities’ scope via the Financial Services & Markets Bill. The bill is currently under parliament review and applies as the UK's post-Brexit financial plan for digital assets. Meanwhile, the bill seeks to allow the FCA to establish regulations for the crypto sector according to applicable laws. But respondents disagreed with the bill when the FCA consulted them last year.
They largely disagreed with proposals like blocking new investors from DOFP (non-real-time promotion offers) and treating cryptocurrencies as high-risk investments. Nonetheless, the Financial Conduct Authority will proceed with implementing the new measures. The FCA pushed forward the new rules and invited comments from the public. The authority aims to ensure that firms clearly understand the new regulations & restrictions on crypto asset adverts.
Overall, the bill clarifies that crypto firms must provide sufficient evidence and conduct adequate due diligence on the underlying asset. These new rules will ensure that crypto ads are transparent, fair, and not misleading. In other words, firms communicating Stablecoin promotions will ensure the claims on fiat currency links and the coin stability are valid. The UK seeks to implement the new rules on crypto ads amid a doubling in crypto ownership estimates in the country from 2021 to 2022.
The FCA published in a separate report that up to 10% of 2,000 people in a recent survey said they own crypto. Above all, the Financial Conduct Authority proposed new regulation as a commitment strategy to prevent and reduce crypto harm. The FCA executive director of competition and consumers also shared his remarks. Sheldon Mills said that although people can invest in crypto whenever they want, research indicates many regretted their hasty decisions.
Thus, the new regulations would give investors apt risk warnings and enough space to make informed decisions. Firms that might breach the upcoming regulations on crypto could face a two-year sentence or pay a fine. The ‘qualifying crypto assets’ market will likely fall starting 8th October amid the new FCA promotions regime. But registered crypto companies will approve their ads through a temporary exemption.
