According to an October 25 statement from the Financial Conduct Authority (FCA), companies are still failing to provide adequate risk disclosures and are making unsupported claims about the benefits of crypto investments, despite the new regulations.
The FCA said it has issued 221 alerts for breaches of the rules that started on October 8th. This comes after it called out 146 violations in the first 24 hours after the rules went live.
While many alerts target apparent crypto investment scams, the FCA has taken action against legitimate businesses too. It placed restrictions on Rebuildingsociety, the firm that helped Binance get approved for UK marketing. Binance subsequently halted new UK sign-ups.
The FCA stated that authorized firms approving crypto promotions must take their obligations seriously or face consequences. It is working with online platforms to remove non-compliant ads and cut off funding.
Under the new rules, crypto promotions can only be approved by FCA-authorized firms and must have prominent risk warnings. Incentives like referral bonuses are banned.
Some industry members believe the strict regulations will boost consumer protection and adoption long-term, though implementing the rules has proven challenging.
The FCA crackdown highlights ongoing growing pains as the UK asserts tighter control over the crypto space. The volume of violations suggests more enforcement may be needed for full compliance.
