The Financial Conduct Authority (FCA) has taken action in response to the growing concerns surrounding the marketing of cryptoassets. With the cryptocurrency market expanding at an unprecedented rate, the FCA has introduced significant changes to the way these digital assets are marketed in the UK. The primary goal of these changes is to safeguard consumers and ensure that cryptoasset promotions adhere to strict regulatory standards.
Effective from October 8, 2023, the FCA has implemented new legislation that places cryptoasset promotions under their regulatory scope. These regulations mandate that cryptoasset promotions must meet specific criteria: they must be clear, fair, free from misleading information, and feature prominent risk warnings. These measures are designed to protect consumers from deceptive or harmful promotions.
The FCA has sent a clear message by issuing 146 alerts about cryptoasset promotions on the very first day of the new regulatory regime. These alerts serve as warnings to a range of businesses, including social media platforms, app stores, search engines, domain name registrars, and payments firms.
The FCA also advises consumers to exercise caution when considering cryptoasset investments. They strongly recommend checking the FCA’s Warning List before making any investments in cryptocurrencies. This list serves as a valuable resource for identifying promotions that may potentially breach the law.
The FCA’s approach is driven by risk assessment. Not all firms will be added to the Warning List immediately, but the list will be updated continually as the FCA identifies businesses that may be unlawfully promoting cryptoassets without engaging constructively.
It is crucial to remember that investing in cryptoassets remains highly speculative, and individuals should be prepared for the possibility of losing their entire investment.
To lawfully promote cryptoassets in the UK, firms must now be authorised or registered by the FCA, or their marketing must be approved by an authorised firm. This move aligns cryptoassets with other high-risk investments, ensuring a consistent regulatory approach.
It’s worth noting that the financial promotion regime applies to all firms marketing cryptoassets to UK consumers, regardless of their location or the technology they use for promotion. The FCA’s rules aim to provide consumers with clarity regarding their cryptoasset purchases and the associated risks.
The FCA acknowledges that firms genuinely working toward compliance will receive a proportionate approach. However, non-compliance will result in the removal of illegal content to protect consumers.
How Neopay can help
Navigating the evolving regulatory landscape surrounding cryptoassets requires vigilance and expertise. At Neopay, we offer comprehensive guidance and solutions to assist firms in adapting to these regulatory changes effectively. Reach out to us today to discover how we can help your business achieve FCA compliance.