The United Kingdom Financial Conduct Authority (FCA) has outlined issues associated with crypto assets’ financial promotions. These issues according to FCA are a product of supervision carried out from 8 October.
The regulator said it has supervising firms following the new regime tailored to risk and misinformation in check. “From 8 October, we have been supervising firms against the new regime that is designed to give consumers the right information and risk warnings,” FCA noted.
From the said date, 8 October, FCA stated that it has identified 3 common issues with cryptoasset financial promotions. These issues include running promotions that do not highlight associated risks, however, claim ‘safety’, ‘security’, or ease of use. Also, FCA said risk warnings are often in small fonts and not prominent enough to be easily seen or read. Additionally, the third issue identified is a lack of sufficient information on associated risks for production on promotion.
The regulator made it clear in its release that cryptoassets promotions are now under their jurisdiction due to a change in legislation.
For authorized firms lincesed to keep crypto asset firms in check, FCA said they are expected to take their regulatory obligations seriously, and if found faulting will be restricted.
Platforms collaborating with the FCA to pinpoint offenders include social media platforms, app stores, payment firms search engines, and domain name registrars. If promotions against the FCA rules are found, they will be removed or blocked.
Furthermore, the FCA has issued 221 alerts to firms illegally promoting cryptoassets to UK consumers, since the launch of the regime. FCA added that the list will continue to be updated. “The list will help consumers understand where firms’ promotions may be breaking the law and to consider the promotion with the full information available.”
Finally, FCA warns consumers that the new marketing rules do not imply crypto assets are not volatile, they remain high-risk and largely unregulated, FCA said. Hence, consumers should manage their risks.
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