FCA issues 146 alerts about crypto promotions in first 24 hours of new regime
The UK Financial Conduct Authority (FCA) issued 146 alerts about cryptoasset promotions on the first day of the new regime.
The FCA expects businesses including social media platforms, app stores, search engines, domain name registrars and payments firms to consider the alerts it has issued and play their part in protecting UK consumers from illegal promotions.
Consumers should check the Warning List before making any investment in crypto. The list will help consumers understand where firms’ promotions may be breaking the law and to consider the promotion with the full information available.
The FCA explains that it takes a risk-based approach, so not all firms of potential concern will be added straightaway. This list will be continually updated as it identifies firms which may be illegally communicating cryptoasset promotions and are failing to engage with it constructively.
Since 8 October 2023, firms wishing to promote cryptoassets in the UK must, by law, be authorised or registered by the FCA, or have their marketing approved by an authorised firm. Under FCA rules, promotions must also be clear, fair and not misleading, labelled with prominent risk warnings and must not inappropriately incentivise people to invest. These changes bring cryptoassets in line with other high-risk investments.
The financial promotion regime applies to all firms marketing cryptoassets to UK consumers, regardless of whether the firm is based overseas or what technology is used to make the promotion. The FCA’s rules are designed to help people understand what they are purchasing, and the risks involved.
The Government has legislated to bring promotions of certain cryptoassets within the financial promotions regime. Following this change, there are four routes cryptoasset firms can take to lawfully communicate cryptoasset promotions:
- An authorised person communicates the promotion.
- An authorised person approves the promotion.
- A crypto firm registered under the Money Laundering Regulations (MLR) communicates the promotion.
- The promotion otherwise complies with the conditions of an exemption in the Financial Promotion Order.