Key Takeaways
- The FCA emphasized the need for risk warnings to be clear, prominent, and easily readable
- The FCA’s alert list for non-compliant firms has seen a significant expansion, with 221 companies added to the list
The United Kingdom’s Financial Conduct Authority (FCA) has reported that crypto-promoting firms have breached the country’s new crypto marketing rules a total of 221 times since they came into effect at the beginning of October.
The FCA has identified recurring issues in crypto marketing, leading to these violations, and is actively collaborating with various businesses to combat these illegal promotions.
The FCA’s alert list for non-compliant firms has seen a significant expansion, with 221 companies added to the list since the new marketing regulations took effect on October 8.
These new rules dictate that crypto service providers must either register with the FCA or seek approval from an authorized firm for their communications to local clients.
In a recent post, the FCA highlighted “common issues” it has encountered with crypto promotions, particularly focusing on claims of “security” or “safety” without sufficient risk warnings. The FCA also emphasized the need for risk warnings to be clear, prominent, and easily readable, discouraging the use of small fonts or hard-to-read coloring.
The FCA has expressed its expectations that authorized firms responsible for approving financial promotions by cryptoasset firms take their regulatory obligations seriously. Moreover, the FCA is actively working with social media platforms, apps, search engines, and other entities to block illegal promotions within the country.
The FCA’s recent warning count comes after it revealed that it issued 146 alerts concerning breaches of the new rules within the first 24 hours of the new regulatory regime taking effect.
Furthermore, the FCA took action against an FCA-regulated firm called Rebuildingsociety on October 10, which was Binance’s chosen ad approver for the UK market. As a result, Binance ceased onboarding new clients in the country.
The FCA statement underscored the importance of authorized firms fulfilling their regulatory obligations, and it warned that action would be taken in cases of non-compliance.
Under these new regulations, crypto-related ads can only be promoted or approved by FCA-authorized or regulated firms. These rules apply to all businesses, even those without a physical presence in the UK.
The advertisements must adhere to clear, fair, and non-misleading standards, include prominent risk warnings, and avoid inappropriately incentivizing individuals to invest in cryptocurrencies.
