The UK’s Financial Conduct Authority (FCA) has required crypto firms that market to clients in the UK to comply with its guidelines by October 8, 2023.
As the United Kingdom moves to regulate cryptocurrencies, its financial watchdog has released guidance for companies advertising to consumers in the United Kingdom.
Two years imprisonment for failure to comply with FCA encryption guidelines
On Tuesday, FCA executives Victoria McLoughlin and Lucy Castledine issued a notice Requiring crypto companies to comply with the financial promotion regime. They have given a deadline of October 8, 2023 for crypto companies to market their products to UK consumers.
The Financial Conduct Authority (FCA) has informed companies of four ways to promote crypto assets to UK consumers:
- The authorized person must communicate the promotional offers
- If an unauthorized person sends promotions, they must be approved by the authorized person
- The promotion is being offered by a crypto asset company registered with the FCA under the Money Laundering, Terrorist Financing and Money Transfers Regulations 2017 (MLRs).
- If the promotion qualifies for an exemption requirement under the Financial Promotion Order.
If crypto companies do not comply with these four methods, they could face penalties such as two years in prison, an unlimited fine, or both. The notice further states:
We will crack down on people who illegally promote to UK consumers. This may include, but is not limited to, placing companies on our warning list, taking steps to remove or block any illegal financial promotions such as websites, social media accounts and applications, and enforcement actions. “
A step forward?
FCA expects companies to advertise their offerings through MLR registrations. Hence for registrations, companies must submit the required documents to the Financial Conduct Authority (FCA) and pay the registration fee. After crypto companies submit documents, the FCA has a three-month time period to evaluate the submission.
Community members find the FCA’s coding guidelines to be harsh but clearer. Twitter user books:
“Pretty tough, but if the regulatory line was clearer than it is in the US, it might be a step forward, especially since the UK prime minister is not against it.”
In fact, the United Kingdom has been taking progressive steps to recognize the crypto-asset class. On June 29, BeInCrypto reported that the UK passed the Financial Services and Markets Act 2023, which strengthens the regulation of crypto assets.
Learn more about crypto regulation in the UK here.
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