The United Kingdom’s financial watchdog, the Financial Conduct Authority (FCA), is on the verge of tightening its stranglehold against misleading advertisements in the crypto space.
According to a press release, the new guidelines will see the regulator clamp down on misinformation related to high-risk crypto assets in the U.K.
U.K. Regulator Curtailed False Adverts
The prevalence of inaccurate information about investments in volatile assets like cryptocurrency has been a worry for regulators worldwide. Since the beginning of the year, the U.K. government has been working on laying the regulatory framework for the crypto industry.
Accordingly, advertising crypto products and services are seen as the first point of focus for the government before proceeding with other aspects of regulation. As a result, the FCA oversees the marketing of high-risk digital assets in the United Kingdom.
However, the proposal is still a work in progress as legislators have yet to approve the new guidelines. Upon confirmation, the FCA will issue its draft rules on promoting and marketing crypto assets.
Cryptocurrency is widely regarded as a high-risk commodity where investors and traders will continue to lose their money.
In addition, for companies offering digital financial products, the new rules require them to have the necessary expertise in marketing their services. Moreover, they are also required to undergo a comprehensive check on the consumers to ensure their investments are attuned to their needs.
Meanwhile, the FCA has announced that it will ban some investment incentives to attract more customers. The FCA will also ban things like referral bonuses and welcome bonuses. Additionally, the regulator wants the crypto firms to make clearer warnings about the investment risks associated with their products.
The FCA noted that it wants a simplified risk warning on all crypto assets as a measure to help consumers understand risks better, and the firms have a big role to play in this.
FCA’s executive director of markets, Sarah Pritchard, noted that things become simpler and clearer when all stakeholders are involved. The FCA will not hesitate to act when products have no clear warning or have a misleading message, added Pritchard.
The U.K. is Poised to Checkmate Crypto Transactions
Like other European countries, the U.K. has a robust crypto regulatory framework focusing on Bitcoin. However, many rules are heavily centered on checkmate and curbing money laundering through cryptocurrency.
As a result, any entity interested in operating within the confines of the United Kingdom must be registered with the FCA. Businesses registered in the U.K. and offering crypto payment options must also comply with the FCA’s directive.
The U.K. has not officially banned cryptocurrency as consumers can easily purchase digital assets. However, the FCA always emphasizes that the most critical factor for regulating cryptoassets trading is to avoid financing terrorism and money laundering.
Therefore, registration and compliance with the financial watchdog are necessary before a crypto firm will be allowed to do business on the shores of Britain.