FCA to Spank Crypto Entities Violating Promotion Regulations

The United Kingdom regulator, the Financial Conduct Authority (FCA) is set to publicly identify and reprimand crypto entities deviating from the newly enhanced rules governing the marketing of their products. 

As reported by Bloomberg, this proactive stance aligns with the UK’s commitment to transparency and accountability. Also, it underscores the regulatory body’s resolve to ensure a more responsible and secure environment within the cryptocurrency sector.

FCA Promotes Transparency and Accountability

The focal point of these intensified regulations is to mitigate the risks associated with high-stakes financial promotions, particularly in the context of the burgeoning crypto landscape. By promptly exposing firms that transgress these guidelines, the FCA aims to deter practices that could potentially harm investors and disrupt the stability and integrity of the financial markets.

Furthermore, the swift naming and shaming strategy directly addresses concerns related to the gamification of trading platforms. Recognizing the potential for harm in making trading excessively game-like, the FCA seeks to curb practices that may encourage risky behavior among users, and foster a trading environment that prioritizes responsible conduct.

FCA Introduces New Restrictions on Crypto Advertising

As part of its effort to prioritize citizens’ protection and safeguard them from uncalculated risks of exposure to crypto scammers, the FCA introduced new set of restrictions for crypto advertising in June. this means that crypto advertisers and other financial influencers (finfluencers) in the UK would face stricter measures. The rule is scheduled to take effect from October 8.

The restriction mandates that first-time investors are given a 24-hour “cooling-off period” during which they are not allowed to make any transactions after completing their registration process. Also, “Refer a Friend” bonuses will no longer apply to individuals who recruit more people to purchase a particular crypto asset.

Recall that, the UK regulator and the Advertising Standards Authority (ASA) collaborated with Love Island Star– Sharon Gaffka to enlighten these advertisers (finfluencers) on the risks of promoting illegal schemes dubbed “get rich quick”.

FCA’s New Rule Meets Opposition 

While the FCA is well within its rights to roll out rules, the restriction has sparked some level of opposition from crypto firms in the region. Su Carpenter, the operations director of the organization has requested that FCA give the association time to review findings and evidence that necessitates the 24-hour cooling time. 

Also, he said that he hopes that the new restriction will not negatively impact customers’ confidence to transact on these crypto platforms.