Crypto companies are breaking the new UK promotional rules around 13 times a day

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FCA’s strict restrictions on authorized firms Routes that crypto companies can use for promotions Tells news

Crypto companies have breached the UK’s new promotional rules at least 221 times since they came into effect on October 8, the Financial Conduct Authority says (FCA) said.

The most common breaches included companies failing to provide their customers with adequate information about the risks associated with promoted products, with risk warnings not visible due to small fonts, and claims about safety, security or ease of use using cryptocurrencies without emphasizing the risks. the FCA said.

Discover the three common problems we identified #cryptoassets financial promotions.

Consumers should consult the FCA warning list before investing in this product #crypto https://t.co/CKn4cFxb11

— Financial Conduct Authority (@TheFCA) October 25, 2023

The watchdog’s final warning comes afterwards issued Just a day after the new regime went live, 146 warnings were received about breaches of the new rules.

FCA’s strict restrictions on authorized firms

The watchdog said it has taken action against one company, which is rebuilding society.com, to prevent it from fof approving financial promotions for crypto assets.

Binance UK, which the company then used for its communications onboarding suspended new UK users.

“We expect authorized companies that approve the financial promotions of crypto asset companies to take their legal obligations seriously,” the report said. “Where this does not happen, we will take action.”

It added that it is working with companies including social media platforms, app stores, search engines and domain name registrars to block illegal promotions. The watchdog is also working with payment companies to limit UK consumers’ exposure to companies issuing illegal advertisements.

“These companies must consider our issued warnings and play their role in protecting UK consumers,” the FCA added.

Under the new regime, companies wishing to promote crypto assets in Britain must be legally authorized or registered by the FCA, or have their marketing approved by a trusted company. Promotions must be transparent, fair and not misleading and clearly carry clear risk warnings.

The new regime applies to all companies marketing crypto assets to UK consumers, regardless of whether the company is based abroad or uses the technology to promote it.

Routes that crypto companies can use for promotions

There are several routes that crypto asset companies can take to legitimately communicate the promotion of crypto assets under the new rules.

These include an authorized person sharing the promotion, an authorized person approving the promotion, a crypto firm registered under the Money Laundering Regulations (MLR) communicating the promotion, and the promotion meets the conditions of an exemption in the Financial Promotion Order.

It’s worth mentioning that FCA Rules are designed to help people understand what they are buying and the risks associated with it. The watchdog has said it will continually identify and take action against companies illegally promoting crypto assets to UK consumers.

Furthermore, the list will be continuously updated as the company identifies platforms that illegally communicate crypto asset promotions and fail to participate constructively.