UK crypto advertisers have defied FCA’s rules at least 221 times
- The new regulations require FCA-authorized firms to approve crypto-related ads.
- However, this is not the first time that the FCA has raised concerns.
According to the UK’s Financial Conduct Authority (FCA), since the enforcement of new cryptocurrency advertising regulations in the United Kingdom on 8 October, companies promoting crypto have violated these rules at least 221 times.
The FCA announced on 25 October that companies have still not provided sufficiently visible risk warnings and adequate risk information. Additionally, they have not made claims about the safety, security, and ease of using cryptocurrencies without adequately highlighting the associated risks.
This is despite the introduction of crypto promotion rules earlier in October.
Violations keep piling up since new rules took effect
This is not the first time the FCA has raised concerns. On 9 October, the FCA reported that it had issued 146 alerts about violations of the new rules within 24 hours of the new regime taking effect.
A significant number of the FCA’s crypto-related alerts appear to relate to illegitimate schemes offering high-yield returns on crypto investments. However, the FCA has also taken action against seemingly legitimate businesses.
On 10 October, the FCA revealed that it had placed restrictions on Rebuilding society, the FCA-regulated firm that Binance [BNB] had partnered with, to approve its marketing and communications to comply with the FCA’s new rules.
Binance subsequently suspended onboarding new users from the UK.
FCA ready to take further action
The FCA emphasized that authorized firms approving the financial promotions of crypto asset firms must take their regulatory obligations seriously. The FCA is prepared to take action if this doesn’t happen.
The regulator is actively working with social media platforms, app stores, search engines, domain name registrars, and payment providers to remove, block, and prevent funds from flowing to banned promotions.
The new regulations mandate FCA-authorized or regulated firms to promote or approve crypto-related advertisements. They apply to all businesses, even those without a UK presence.
These rules demand that these promotions include prominent risk warnings and refrain from encouraging cryptocurrency investment. Common practices in overseas markets, like referral bonuses and memes, face bans or restrictions in the UK under these regulations.
James Young, the head of compliance at Transak, explained that the FCA’s regulatory framework is challenging for businesses to implement. However, he expressed the belief that it would significantly boost consumer protection and promote adoption on a larger scale.