The Financial Conduct Authority is cracking down on crypto marketing with the introduction of new rules designed to make the marketing of crypto asset products clearer and more accurate.
The rules, which will also ban incentives such as ‘refer a friend’ bonuses, are set to come into force on 8 October and will provide UK consumers with “much greater protection.”
As part of the new requirements, firms’ marketing must be clear, fair and not misleading, labelled with prominent risk warnings and must not inappropriately incentivise people to invest. The rules apply to firms wherever they are based globally.
Firms who breach the rules by continuing to promote crypto assets to UK customers past the October deadline could be punished with an unlimited face and/or up to two years imprisonment.
However, the FCA has signalled that it will consider giving crypto asset firms more time to implement certain changes, for instance the introduction of a 24 hour cooling off period. Firms could also be given until 8 January 2024 to introduce features that require greater technical development.
Lucy Castledine, director of Consumer Investments at the FCA, said: ‘From this October, crypto firms must market to UK consumers clearly, fairly and honestly. And they must provide risk warnings people understand. As a proportionate regulator, we’re giving firms that apply a little more time to get the other reforms requiring technology and business change right. We’ll maintain our close eye on firms during this extended implementation period.
‘We are concerned by the failure of many overseas and unregulated crypto firms to engage with us on the new rules. Come 8 October, we will be taking action against firms illegally marketing to UK consumers.”
