Cryptocurrency-related businesses operating in the United Kingdom may soon have to adapt to tougher regulations on cryptocurrency advertising.
Financial Conduct Authority (FCA), a financial regulatory body in the United Kingdom, is planning to tighten crypto advertising rules.
According to the statement shared by FCA on February 6th, new advertisement regulations will be applied to all crypto firms that were registered “with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘MLRs’).”
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Under the new regulations, crypto-related firms will be able to communicate their crypto asset promotions in only four routes.
The first route is to communicate through an “FCA authorized person.” The second route is to share promotions through “an unauthorized person but approved by an FCA authorized person.”
The third route allows sharing a promotion by “a crypto asset business registered under the MLRs with the FCA.” Lastly, crypto firms can share their advertisement if “the promotion otherwise complies with the conditions of an exemption in the Financial Promotion Order.”
FCA claims that if firms were caught violating the advertisement rules, the UK's financial watchdog will issue a public warning, take down the company's website or enforce other drastic measures. On top of that, FCA stated that the executives of crypto firms can face up to two years in prison if their company fails to comply with UK’s advertising rules.
In the statement, FCA highlighted that cryptocurrencies are considered “high-risk” investments.
Crypto assets remain high risk. We have repeatedly warned that consumers should be prepared to lose all of their money if they buy crypto assets. Recent events such as the high-profile failure of several crypto asset firms further highlight the riskiness of these products.
At the time of publication, FCA claimed that it is currently waiting for “relevant legislation” to share “final rules for crypto asset promotions.”
