The UK Government has established a new crypto promotion rule that is expected to guide the promotion of crypto businesses to customers. The new regulation also applies to crypto companies that were founded in the UK but have their headquarters abroad.
Based on the proposal, the UK Financial Conduct Authority (FCA) is expected to provide oversight and direction for the new policy’s implementation. Although the new rule is still being reviewed by the UK parliament, crypto firms have been threatened with a two-year prison sentence if they violate it.
The regulators also warned crypto firms that their websites could be taken down if they breach the new advertisement rule.
According to the proposed rule, there are four options by which crypto companies can advertise their businesses to UK customers.
These include an FCA-authorized person is responsible for communicating the advertisement; the promotion must be approved by an authorized FCA-authorised individual if the promotion is made by an unauthorized person; a crypto asset business registered with the FCA under the Money Laundering, Terrorist Financing, and Transfer of Funds communicates the promotion, and; the promotion satisfies the conditions of an exemption in the Financial Promotion Order.
Crypto Oversight in the UK
The FCA is the primary watchdog for the cryptocurrency industry in the United Kingdom. The FCA is in charge of regulating companies that provide crypto-related services, such as exchanges and trading platforms, to ensure that they adhere to consumer protection and anti-money laundering regulations.
The FCA also collaborates with other government agencies, such as the National Crime Agency, to monitor and combat financial crime in the cryptocurrency space.
In August, The FCA gave orders to businesses that promote high-risk assets, to make risk warnings to the public more explicit and noticeable. The FCA has also enacted stronger requirements to counter false advertising that tempts consumers to invest in high-risk products.
The National Cyber Crime Unit (NCCU) is another agency that has expanded its reach to the crypto ecosystem. The agency recently announced that it has created a new crypto unit and is therefore open to receiving new employees.