The UK Financial Conduct Authority (FCA) has announced that all cryptoasset businesses must comply with its rules on financial promotions by 31 March 2024. The FCA said that this deadline will give crypto firms enough time to prepare and implement the necessary changes to their marketing materials and practices.
The FCA’s rules on financial promotions aim to ensure that consumers are not misled or confused by the advertisements or communications of financial products or services. The rules require that any financial promotion is clear, fair and not misleading, and that it includes appropriate risk warnings and disclosures.
The FCA said that it has observed a significant increase in the number of cryptoasset businesses that are engaging in financial promotions, especially online and on social media platforms. The FCA warned that some of these promotions may be misleading, inaccurate or omit important information, such as the risks of investing in cryptoassets or the regulatory status of the firm.
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The FCA said that it will continue to monitor the market and take action against any cryptoasset business that breaches its rules on financial promotions. The FCA also reminded consumers that most cryptoasset businesses are not authorised or regulated by the FCA, and that they may not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.
The FCA’s announcement follows its previous guidance on cryptoassets, which clarified how different types of cryptoassets fall within its regulatory perimeter. The FCA also introduced a temporary registration regime for cryptoasset businesses that applied for registration before 16 December 2020, and extended it until 31 March 2022.