According to the Financial Times on Monday, the British Treasury is finalizing plans for a scheme to regulate crypto businesses in the region. The plan reportedly includes prohibitions on foreign corporations selling in the country and curbs on advertising.
According to sources, the package will grant the Financial Conduct Authority (FCA) expanded authority to regulate the sector, including the ability to oversee how firms function and advertise their products.
The U.K. to checkmate cryptocurrency transactions
After the market upheaval caused by the bankruptcy filing of crypto exchange FTX in the U.S. bankruptcy court last month, new restrictions were introduced. The United Kingdom, like many other European nations, has a comprehensive crypto regulatory framework with a primary emphasis on Bitcoin. Yet many regulations are geared against checkmating and preventing money laundering via cryptocurrency.
As a result, the FCA requires registration from any business planning to conduct operations within the United Kingdom. The FCA’s order applies to businesses in the United Kingdom and those based anywhere else that accept cryptocurrency as payment.
As cryptocurrency is still widely available to buy in the United Kingdom, there is no indication that it has been banned. The FCA has been clear that stopping money laundering and the financing of terrorism is the top priority when it comes to regulating the trading of crypto assets.
U.K. regulator to curtail false adverts
Governments worldwide have been concerned about spreading false information regarding investments in risky assets like cryptocurrency. The British government has been hard at work since the start of the year, establishing regulations for the cryptocurrency sector.
As a result, the government is expected to focus first on regulating the promotion of cryptocurrency products and services before moving on to other parts of regulation. Therefore, the FCA monitors the promotion of potentially dangerous crypto assets in the U.K.
But legislators still need to approve the new regulations, so the project is still in the works. The FCA will publish their proposed regulations for advertising and promoting cryptocurrency assets as soon as approved.
In addition, the new regulations stipulate that providers of digital financial products must possess the requisite marketing know-how. Investors must also submit to a thorough consumer screening to guarantee that their funds are used wisely.
While doing so, the FCA has declared that it will prohibit some investment incentives designed to entice new customers. The regulator will also prohibit welcome bonuses and referral incentives.
The crypto industry is under pressure from the authority to provide more transparent information about the dangers of investing in their products. To help customers better understand risks, the FCA has stated that it desires a simple risk alert on all crypto assets, and the firms play a significant part in this.
According to FCA’s executive director of marketing, things get easier and clearer when all participants participate. Pritchard emphasized that the FCA will take action when there is no warning or a deceptive statement on a product.