UK Financial Watchdog Cites Over 200 Violations of New Crypto Ad Rules
The FCA identifies 221 breaches in new crypto ad regulations since early October.
Thu, 26 Oct 2023, 15:01 pm UTC
The United Kingdom’s primary financial overseer, the Financial Conduct Authority (FCA), has reported multiple infractions of the recently introduced cryptocurrency advertising regulations. Since early October, when these rules were rolled out, the agency detected 221 instances where crypto-related companies did not adhere to the prescribed guidelines.
The FCA's observations, shared on October 25, revealed that several businesses have not adequately emphasized the potential risks associated with cryptocurrency investments in their marketing endeavors. The transparency in showing risk factors and the complete disclosure of potential hazards have been major points of contention.
Just a day after these rules were instated on October 8, the FCA had already flagged 146 instances of potential breaches within the first 24 hours. The issues highlighted were not restricted to obscure entities alone.
Established businesses and partnerships came under scrutiny as well. Case in point: Rebuildingsociety, a regulated entity that collaborated with Binance for its marketing campaigns, faced restrictions from the FCA. This action led Binance to pause its new user registrations within the UK.
The FCA's message was clear. Companies that are entrusted with approving crypto advertising should not take their responsibilities lightly. The agency made its intent to act decisively known. To this effect, collaborations have been initiated with various digital platforms, including social media sites, search engines, and payment portals. Their collective goal is to clamp down on unauthorized promotions and prevent the monetary transactions supporting them.
The guidelines set forth by the FCA dictate that only entities with the necessary authorization or regulation can promote crypto-related advertisements. This rule applies universally, irrespective of a company's geographical location. The promotional content should always incorporate conspicuous warnings about potential risks. The FCA has also barred specific promotional practices commonly seen overseas, including memes and referral bonuses.
James Young, who oversees compliance at Transak, remarked to news about the rigorous nature of the FCA’s directives. However, he also expressed optimism, believing that such measures could bolster consumer confidence and drive adoption rates substantially higher.
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