FCA Issues 146 Alerts in First 24 Hours of New Cryptoasset Marketing Regulations
The FCA has made clear it will take action against firms breaching financial promotions regime. Within the initial 24 hours of the Financial Conduct Authority (FCA) introducing more stringent regulations aimed at enhancing the transparency and accuracy of cryptoasset product marketing, the FCA has issued a total of 146 alerts regarding promotional activities within the crypto space.
The inclusion of cyrptoasset firms to the Financial Promotions Regime enforced by the FCA, has been crafted with the goal of ensuring the safety of consumers engaging with cryptoasset products and eliminating practices such as ‘refer a friend’ bonuses. As of October 8th, any firms intending to promote cryptoassets in the UK must adhere to legal requirements, which include obtaining authorisation or registration from the FCA or having their marketing materials approved by an authorised entity.
Under the Financial Promotions Regime, promotions related to cryptoassets must be explicit, equitable, devoid of misleading information, and accompanied by conspicuous risk warnings. Furthermore, these promotions are prohibited from inappropriately incentivising individuals to invest. These updates bring cryptoassets in line with the standards applied to other high-risk investment products.
It’s worth noting that the financial promotion regulations encompass all businesses marketing cryptoassets to UK consumers, regardless of their geographical location or the technology employed for promotion. The FCA’s intent behind these rules is to facilitate consumer comprehension of their cryptoasset purchases and the associated risks.
While over 100 firms found their way onto the regulator’s warning list on October 8th alone, the FCA clarified that it employs a risk-based approach, implying that not all potentially concerning firms will be immediately included on the list. This list will continue to evolve as the FCA identifies entities that may be unlawfully promoting cryptoassets and failing to engage in constructive dialogue with regulatory authorities.
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The FCA Emphasises the High-Risk Nature of Cryptoasset Investments
Additionally, the FCA has emphasised the high-risk nature of investing in cryptoassets, cautioning individuals to be prepared for the possibility of losing their entire investment when engaging in this space. The FCA anticipates that various entities, including social media platforms, app stores, search engines, domain name registrars, and payment service providers, will take heed of the issued alerts to ensure the protection of UK consumers against illicit promotional activities.
How Complyport Can Support You
As experienced and leading Compliance Consultants, we provide tailored support to cryptoasset firms seeking clarity and full compliance with these new FCA regulations.
Whether it’s helping you to understand the financial promotions rules or aiding you in applying for the 8 January 2024 extension, our experts can help.
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Don’t navigate the complex world of FCA regulations alone. Contact our team of Compliance Consultants for personalised support for your needs. Book a consultation call today to ensure a compliant and secure future in the crypto space.
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