The Financial Conduct Authority (FCA) issued 146 alerts about crypto promotions on the first day of new rules on the marketing of such assets.
The new rules, which came into force on 8 October, require firms seeking to promote crypto-assets in the UK to be authorised or registered by the FCA, or have their marketing approved by an authorised firm. These changes bring crypto-assets in line with other high-risk investments.
Under FCA rules, promotions must also be clear, fair and not misleading and labelled with prominent risk warnings. Additionally, they must not inappropriately incentivise people to invest.
The new regime applies to all firms marketing crypto-assets to UK consumers, even if they are based abroad and regardless of the technology they use to promote the assets.
Four legal ways to promotion
According to the FCA, there are four ways firms can promote crypto-assets without falling foul of the law: an authorised person does the promoting; an authorised person approves the promotion; a crypto firm registered under the money-laundering regulations communicates the promotion; or the promotion complies with the conditions of an exemption.
The regulator emphasised that potential investors should check its warning list before making any investment in crypto-assets, to help them understand where firms’ promotions may be breaking the law and to ensure they consider the promotion with the full information available.
The FCA also said the list would be continually updated as more firms come to light which may be illegally communicating crypto-asset promotions and “failing to engage with us constructively”. It added that people should continually bear in mind that buying cryptoassets is high-risk and they should be prepared to lose all their money.
‘Robust action’
“We expect businesses including social-media platforms, app stores, search engines, domain-name registrars and payments firms to consider the alerts we have issued and play their part in protecting UK consumers from illegal promotions,” the FCA said. “In the case of non-compliance, we will take robust action to remove illegal content to protect consumers.”
