UK Financial Watchdog Imposes Strict Rules for Crypto Ads
Last year legislators in the UK took up issue with the cryptocurrency advertisements in the country. However, recently the Financial Conduct Authority or FCA is once again going after crypto marketing and advertisement rules.
The financial regulator officials have maintained that the new restricting laws are introduced to protect the interests of the citizens in the country and save them from potential losses. At the same time, FCA officials also maintain that the new guidelines to restrict crypto ads in the country warn potential investors about engaging with the crypto entities.
The new rules for crypto firms have been issued by FCA on June 8. It is worth mentioning that FCA oversees the performance and financial performance of more than 50K financial entities that are operating in the region.
The new set of rules is meant to control and limit the cryptocurrency adverts that are displayed in the country and introduce the citizens regarding available cryptocurrency options available at their disposal.
In the past, several banking enterprises in the country have issued formal warnings to their consumers concerning the use and trading risks associated with cryptocurrencies.
UK Regulators Classify Cryptocurrencies under High-Risk Investment Products
The regulators in the UK have fashioned the new crypto advert regulations based on its high-risk market investment policies. The country is using traditional financial guidelines as a frame of reference for chartering new regulatory requirements for the crypto markets.
To this end, the FCA has also classified several cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Dogecoin, and various others as high-risk investment assets. It means that all the crypto advertisements must now include a visible risk warning for the consumers.
These regulatory changes will apply to all forms of marketing ventures. Meanwhile, the crypto investors in the region that have been enjoying discounts and crypto rewards would not be able to continue anymore.
It so happens that the new regulatory guidelines have also banned referral links and other similar schemes. At the same time, the regulators have also introduced a 24-hour probation period for crypto investors who are venturing into the market for the first time.
It means that every new registrar will have to go through a full-day waiting period to get started and approve their profiles. Consumers and Competition Division Director Sheldon Mills has explained that the rules by FCA are implemented based on research that shows that most people regret making hasty crypto trading decisions. He has maintained that new rules retain the individual freedom to purchase and trade cryptocurrencies.
UK Crypto Sector Resists Restrictive FCA Regulations
At one end, the financial regulators have maintained that the new regulations are amended to ensure the safety and security of the consumers. However, these new regulations are still not accepted by the local crypto sector in the UK.
CryptoUK is an association for cryptocurrency entities that are operational in the region. The association has raised questions about the need for the 24-hour cool-off period rule that has been added by the FCA in the recent regulatory amendments.
Su Carpenter is the head of the crypto association. She maintained that the enterprise is going to appreciate getting some solid evidence to back the implementation of the 24-hour delay rules. She also maintained that the regulators should reconsider the legal status of cryptocurrencies as mere investment assets.
Carpenter maintained that crypto products often offer more utility such as financial transactions in addition to just being market investment products.
