All companies that sell crypto assets to customers in the UK must comply with the Financial Conduct Authority’s financial promotion rules by October 2023, according to the FCA.
The FCA stated in letters dated July 4 that from October 8, businesses doing business in the U.K. will only have “four routes to lawfully communicate crypto asset promotions’ in order to comply with the framework set down by the financial watchdog. These legal options included having a promotion generated by a company registered with the FCA, having a promotion approved or communicated by an authorized person, or having a promotion that met the requirements for exemption under the Financial Services and Markets Act of the United Kingdom.
The financial regulators defined promotions as “websites, mobile apps, social media posts, and online advertising,” all of which were “capable of having an effect in the UK” and weren’t just available to businesses with a presence there. In a July 4 LinkedIn post, Jayson Probin, the FCA’s lead for cryptocurrency financial promotions, stated that businesses’ failure to comply could result in criminal prosecution.
According to the FCA notice, strong measures will be taken against individuals or entities that unlawfully promote to consumers in the UK, which may involve actions such as adding firms to the warning list, requesting the removal of websites, social media accounts, apps, and any other non-compliant promotions, as well as an enforcement action.
On June 8, the FCA suggested that crypto businesses adopt a marketing strategy that gives clients a “cooling-off period” to think about the hazards of investing in digital assets. The FCA warned that it could take up to three months to review an application after businesses submit the necessary documentation for registration.
Companies that wish to “carry out crypto asset activities” in the UK must register with the FCA in addition to adhering to the regulator’s marketing requirements. The FCA listed 42 registered cryptocurrency businesses that complied with its standards at the time of publication, including Bitstamp, Revolt, MoonPay, and Galaxy Digital UK.
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