Key Points
- FCA has introduced stricter crypto regulations in the U.K. that will take effect in October 2023.
- The new regulations include a “cooling off period” for first-time investors and a ban on “refer a friend bonuses.”
Crypto ads in the U.K to be under stricter regulation-FCA
The U.K. continues to crack down on crypto advertisements as the FCA introduces newer and stricter regulations. The regulator seeks to abolish the refer-a-friend bonus program used for advertising crypto projects, alleging that it hinders the chance for people to decide whether or not they want to be part of a project.
The regulator also introduced a cooling-off period for first-time investors to be implemented in all companies in the U.K. In an official statement, the executive director of consumers and competition at the FCA, Sheldon Mills, said that while the decision to buy or invest in crypto-related investments relies solely on an individual, it can be easily influenced by the kind of marketing done and lead them into making impulsive decisions that would cause regrets.
Mills added that extra guidance is needed to protect crypto investors in the U.K. in such a decision-making process
“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”
The new rules require crypto companies to verify that individuals possess the necessary knowledge to handle crypto investments. Additionally, to promote these crypto assets, companies must include the associated risks to enhance transparency and ensure that their advertisements are fair, clear and devoid of any misleading information that could result in significant losses.
This news comes when the U.S. is pressing on with crypto regulation as the SEC is charging the two largest crypto exchanges, Binance and Coinbase, over allegations of exposing investors to risky crypto assets. Keep watching Fintech Express for updates on crypto regulation and either Fintech-related developments.