UK Regulator Issues Stern Warning to Crypto Businesses Over Promotion Rules Compliance

The UK’s Financial Conduct Authority (FCA) has issued a strong warning to cryptocurrency firms operating within its purview and demanded that they immediately abide with recently passed financial promotion regulations. This is due to the fact that the majority of cryptocurrency businesses appear to be ignoring these rules.

Only 24 of the more than 150 companies contacted for the FCA’s public statement have provided feedback on the new regulations. These regulations, which are scheduled to go into force the following month, would place strong limitations on the dissemination of financial promotions by “unauthorized and unregistered crypto businesses” to the general public.

The FCA underscored the significance of these adjustments while expressing worry over the underwhelming reaction from foreign crypto asset providers with UK clients. The FCA stated that as of October 8th, cryptocurrency companies “must cease making illegal financial promotions to U.K. consumers.” There might be serious repercussions for breaking these laws, including “up to 2 years imprisonment, an unlimited fine, or both.”

The FCA refrained from immediate comment in response to Decrypt’s inquiry

In accordance with current restrictions for other financial goods, these regulations expressly ban illegal crypto companies from offering UK clients promotions that entice them to invest in crypto assets. Only “purely factual information” and directions on how to manage one’s current assets, such as transferring, withdrawing, or selling them, are permitted in communications.

These guidelines apply to all communication mediums, including social media and applications. Even crypto-related memes may possibly be in violation of the FCA’s advertising policies, according to separate recommendations the agency released in July.

Rumors started circulating last week that cryptocurrency exchange Bybit was thinking about leaving the UK because it was difficult to follow these restrictions. Despite not having made a final decision about the company’s course of action in the region, Bybit CEO Ben Zhou made it clear that compliance remained the company’s top priority.

The FCA is also closely monitoring businesses linked to non-compliant ads. This includes social networking sites, search engines, app stores, and payment providers who may be charged with money laundering if they have ties to unregistered cryptocurrency businesses.

The FCA’s letter to crypto businesses concludes with a stark reminder: “If firms believe they are going to be in breach after the regime comes into force, they need to urgently consider their position.”