FCA Enforces More Stringent Regulations for Promoting Crypto Assets in the UK
New rules by the Financial Conduct Authority (FCA) aim to protect UK consumers investing in crypto assets. Starting October 8, 2023, crypto firms must offer a "cooling-off" period for first-time investors as part of updated advertising regulations.
To ensure investor suitability, crypto companies must verify knowledge and experience. Advertisements for crypto assets must include clear risk warnings and be fair, transparent, and not misleading.
To enhance consumer awareness of risks, "refer a friend" bonuses will be banned. These regulations align with government legislation placing crypto promotions under FCA oversight.
The FCA's decision is based on research showing a doubling of crypto ownership from 2021 to 2022, with 10% of respondents reporting crypto asset ownership.
The FCA's approach aligns with efforts to combat misleading ads for high-risk investments and supports their commitments for reducing harm, setting higher standards, and promoting competition.
Sheldon Mills, FCA's executive director of consumers and competition, stressed the importance of informed decision-making in crypto investments. He highlighted the industry's high risks and lack of regulation, urging the crypto sector to prepare for these changes while assuring additional guidance from the FCA.
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