UK’s Financial Conduct Authority (FCA) will introduce new rules around crypto promotions aimed at safeguarding consumers.
The financial regulator proposal calls for explicit investor warnings and will come into effect on October 8.
SponsoredThe Mandate of Clear Warnings for Crypto Promotions
The FCA’s new regulations require cryptocurrency companies to disclose risks clearly in their ads. This includes warnings like “if something goes wrong” and “be prepared to lose all the money you invest.” Â
There is also a stipulation that firms must give investors a “cooling-off” period, according to the Guardian. The purpose of the cooling-off period is to give potential investors time to think over their choice. It aims to lessen the possibility of impulsive investments.
FCA notifications suggest that investors have a choice to invest in any asset class. However, it encourages customers to take the time to educate themselves about the risks involved before making an informed decision.
Furthermore, the new rules also prohibit bonuses for referring friends to crypto firms. With this step, incentives and promotions in the cryptocurrency market that can be deceptive would be eliminated.
According to Sheldon Mills, executive director of consumers and competition at the FCA, investors must be aware of the dangers of unregulated cryptocurrency investments. Mills emphasized that the FCA’s regulations give people the time and risk warnings they need to make informed choices.
If you want to learn more about changes in crypto regulations in the UK, read our article here:
The State of Crypto Regulation in the United Kingdom
