April 19, 2024
UK’s FCA Warns Crypto Firms
Latest Cryptocurrency News

UK’s FCA Warns Crypto Firms of Upcoming Regulations, Offers Extension

The Financial Conduct Authority (FCA) of the United Kingdom has reiterated its warning to all crypto asset firms that are marketing to users within the country. They must adhere to the rules that will take effect in October 2023. However, the FCA has mentioned that companies may have additional time to implement certain changes.

In a notice dated September 7th, the FCA stated that crypto firms operating in the UK could potentially have until January 8, 2024, to address technical issues related to the financial promotions regime, provided they receive approval for this extension. The regulatory body had previously announced rules aimed at restraining aggressive marketing practices by crypto firms in June. These rules require companies to ensure that their advertisements are clear, fair, and not misleading, or else they may face criminal charges.

Lucy Castledine, the Consumer Investments Director at the FCA, emphasized, “Crypto firms must market to UK consumers clearly, fairly, and honestly. They must provide risk warnings that are understandable. As a regulator that considers proportionality, we are granting firms a bit more time to correctly implement the other reforms that involve technology and business changes.”

According to the FCA, the promotional activities falling under the compliance regime encompass various platforms such as websites, mobile apps, social media posts, and online advertising. These activities are considered to have an impact in the UK and are not limited to firms headquartered within the country.

The FCA has also indicated that it could take strong action against non-compliant firms, including adding their names to a warning list and requesting the removal of their social media accounts and websites. These modifications to the enforcement rules, as outlined in a letter dated September 7th, were prompted by crypto firms not adequately considering how certain rules apply to the specific services they offer in the cryptoasset sector, as well as the substantial changes required for compliance. Only firms granted approval will have until January 8th to comply, while others must meet the deadline of October 8th.

The FCA acknowledges the challenges that firms have faced in preparing for the financial promotions regime, as it represents the first conduct regime for the cryptoasset sector and signifies a fundamental shift in how cryptoasset activities are regulated in the UK. Additionally, companies are required to register with the regulator to conduct crypto asset activities within the United Kingdom. As of the time of this publication, the FCA has listed 42 registered crypto firms that are in compliance with its requirements.

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