Global: UK’s FCA Reports 221 Violations of New Crypto Marketing Rules

Since the United Kingdom introduced new crypto marketing regulations on October 8, crypto-promoting firms have breached these rules at least 221 times, according to the UK Financial Conduct Authority (FCA).

In a statement released on October 25, the FCA expressed its concern that these firms are still not providing adequate risk warnings, sufficient information about the risks, and are making claims about the safety, security, or ease of using cryptocurrencies without appropriately highlighting the associated risks.

This recent tally of warnings from the FCA follows a report on October 9, stating that the regulator issued 146 alerts regarding violations of the new rules within the first 24 hours of their implementation.

While some of the FCA’s alerts appear to target illegitimate schemes promising high-yield returns on crypto investments, the regulator has also taken action against seemingly legitimate businesses. For instance, on October 10, the FCA restricted Rebuildingsociety, a firm regulated by the FCA that Binance partnered with to ensure compliance with the new rules. This partnership led Binance to stop onboarding new users from the UK.

The FCA emphasized its expectation that authorized firms overseeing the financial promotions of cryptoasset firms take their regulatory obligations seriously and warned that it would take action if this did not occur. The regulator is collaborating with social media platforms, app stores, search engines, domain name registrars, and payment providers to eliminate, block, and prevent the flow of funds to prohibited promotions.

The new rules require that crypto-related advertisements can only be promoted or approved by FCA-authorized or regulated firms, and they apply to all businesses, including those without a physical presence in the UK. Promotions must feature prominent risk warnings and must not encourage investment in cryptocurrencies. Promotions commonly seen in international markets, such as referral bonuses and memes, are prohibited and restricted in the UK.

James Young, Head of Compliance at Transak, commented that the FCA’s regulatory regime is quite challenging for businesses to implement but believes that the increased consumer protection will foster adoption on an exponential scale.