FCA tells crypto marketers to stick to ASA guidelines
The UK Financial Conduct Authority (FCA) today issued yet another warning regarding the risks associated with investments in cryptoassets.
The FCA says it has seen some recent social media posts regarding cryptoassets and non-fungible tokens (NFTs), adding that it cannot comment on individual products. The FCA has not been given regulatory oversight over the direct investments in cryptoassets and NFTs.
There are no consumer protections for those who buy any cryptoassets and NFTs, and they are not FSCS protected. As a result, if you buy cryptoassets you should be prepared to lose all the money you invest.
Those marketing cryptoassets must stick to the guidelines set out by the Advertising Standards Authority (ASA) and state that cryptoassets are not regulated by the FCA. Marketing must also make clear that cryptoassets are not protected by financial compensation schemes. The ASA has investigated multiple adverts for cryptocurrencies which did not make it clear that the product was not regulated or protected in the UK.
In March, the ASA said it had issued an Enforcement Notice to over 50 companies which advertise cryptocurrencies, instructing them to review their ads and to ensure they understand and are complying with the rules so that consumers are treated fairly.
The Enforcement Notice provides guidance to the crypto industry on how to stick to the rules and warns that the ASA will monitor for compliance and implement sanctions if it does not see improvements. The guidance requires that advertisers:
- should clearly state that cryptocurrencies are unregulated in the UK and that the value of investments are variable and can go down;
- must not state or imply that investment decisions are trivial, simple, easy or suitable for anyone;
- must not imply a sense of urgency to buy or create a fear of missing out, or that investments are ‘low risk.’