The United Kingdom’s financial regulator has outlined its stringent crackdown on cryptocurrency firms that fail to provide adequate disclosures and measures to ensure new investors understand the risks involved with crypto.
The UK regulator has taken action against 450 crypto ads for violating its strict new rules.
UK Regulator Scrutinizes Crypto Ads
In a recent statement, the Financial Conduct Authority (FCA) reported issuing 450 consumer warnings against crypto firms violating laws through advertisements during the last three months of 2023.
“Between 8 October 2023 (when the regime came into force) and 31 December 2023, we have issued 450 consumer alerts against firms illegally promoting cryptoassets.”
However, the FCA clarified issuing a license, s21, enabling authorized firms to approve crypto advertisements on behalf of unregistered firms. The rules and requirements will be stringent.
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Throughout the board, the FCA has escalated its issuance of alerts regarding promoting financial products over the past two years. In 2023 alone, they issued 2,285 alerts. This indicates that crypto warnings made up around 20% of all alerts.
Additionally, the FCA has already prohibited one specific unnamed firm from ever promoting its crypto products.
“We have placed requirements on one firm to restrict it from approving cryptoasset financial promotions. Another firm has voluntarily agreed to requirements to restrict it from approving cryptoasset financial promotions.”
However, the FCA emphasized that s21 authorized firms must stay abreast of developments in the crypto industry, demonstrate competence, and adhere to all rules and regulations.
UK FCA Tightens Grip on Crypto
This ensures investors are not misled or deceived by crypto advertisements.
In December 2023, BeInCrypto reported that the FCA put Justin Sun’s crypto exchange, Poloniex, under scrutiny for providing financial services without the necessary permissions.
Additionally, the FCA’s official website warned that the crypto exchange may have been conducting business with UK citizens without registering with the financial watchdog. The FCA wrote:
“This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.”
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For some time now, the FCA has been actively targeting both crypto advertisements and influencers. In July 2023, the regulator specifically focused on memecoins within the crypto industry.
In a statement, the FCA emphasized that influencers promoting memecoins must still comply with FCA rules, which they may not be aware of.
The FCA implemented formal rules in October 2023 dictating how crypto firms promote products to the public.
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