- The new regulations require FCA-authorized firms to approve crypto-related advertisements.
- However, this is not the first time the FCA has expressed its concerns.
According to the UK Financial Conduct Authority (FCA), since new rules on cryptocurrency advertising were enforced in the UK on October 8, companies promoting crypto have broken the rules at least 221 times.
The FCA announced on October 25, it emerged that companies have still not provided sufficient visible risk warnings and adequate risk information. Moreover, they have not made any claims about the safety, security and ease of using cryptocurrencies without sufficiently emphasizing the associated risks.
This is despite the introduction of crypto promotion rules earlier in October.
Since the new rules came into effect, violations continue to pile up
This is not the first time the FCA has expressed its concerns. On October 9, the FCA reported that it had issued 146 warnings about breaches of the new rules within 24 hours of the new regime coming into effect.
A significant portion of the FCA’s crypto-related cases warnings appear to be related to illegitimate schemes that offer high returns on crypto investments. However, the FCA has also taken action against apparently legitimate companies.
On October 10, the FCA revealed that it had imposed restrictions on Rebuilding Society, the FCA-regulated company that owns Binance [BNB] had worked together to approve marketing and communications to comply with the FCA’s new rules.
Binance subsequently suspended the onboarding of new users from the UK.
FCA is ready to take further action
The FCA emphasized that authorized firms approving the financial promotions of crypto asset companies must take their legal obligations seriously. If this does not happen, the FCA is prepared to take action.
The regulator is actively working with social media platforms, app stores, search engines, domain name registrars and payment providers to remove, block and prevent funds from flowing to banned promotions.
The new regulations require FCA-authorized or regulated companies to promote or approve crypto-related advertisements. They apply to all companies, even those without a UK presence.
These rules require that these promotions contain prominent risk warnings and refrain from encouraging cryptocurrency investments. Common practices in overseas markets, such as referral bonuses and memes, will be banned or restricted in Britain under these regulations.
James Young, head of compliance at Transak, explained that the FCA’s regulatory framework is challenging for firms to implement. However, he expressed the belief that this would significantly increase consumer protection and promote wider adoption.