UK crypto firms could be jailed for 2 years for violating advertising laws
- The new proposed advertising rules in the UK could subject executives of crypto firms to up to two years in prison for failing to meet certain promotion requirements.
- Crypto firms would need either FCA authorization or an exemption under the Financial Promotion Order to advertise their services.
According to the United Kingdom’s financial watchdog, new proposed advertising rules in the country could subject executives of crypto firms to up to two years in prison for failing to meet certain promotion requirements.
The UK Financial Conduct Authority revealed in a 6 February statement that if the Parliament approves the proposed “financial promotions regime,” all crypto firms in the country and abroad will be required to follow certain requirements when they advertise their crypto services to customers in the U.K.
The FCA stated that crypto asset businesses marketing to UK consumers, including those based outside the U.K., must prepare for this regime. According to the regulator, acting now will help ensure that crypto firms can continue to legally promote their services to UK consumers.
FCA proposes new crypto promotion regime
As a part of the FCA’s proposed regime, crypto firms would need either FCA authorization or an exemption under the Financial Promotion Order to advertise their services.
According to the regulator, there are only four ways for a crypto company to market its services to customers in the United Kingdom:
- The promotion is communicated by an FCA-authorized person
- The promotion is made by an unauthorized person but approved by an FCA-authorized person
- The promotion is communicated by a crypto enterprise registered with the FCA under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017
- The promotion meets the conditions of an exemption in the Financial Promotion Order
Any promotion made outside of these channels, according to the regulator, will violate the Financial Services and Markets Act of 2000 (FSMA), which carries a criminal penalty of up to two years in prison. Aside from potential prison time for its executives, companies caught violating the new regime may also face the removal of their website, public warnings, and other enforcement actions.