In order to make sure that crypto ads are clear and fair for consumers, the U.K. government plans to establish new rules. Financial Conduct Authority (FCA) will enforce the rules.
UK To Impose New Rules for Crypto Ads
The U.K. government announced Tuesday plans to impose new rules on cryptocurrency advertisements to “protect consumers from misleading claims.” The announcement states:
The new rules increase consumer protection and encourage innovation.
The U.K. chancellor of the exchequer, Rishi Sunak, commented: “Crypto assets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims.”
The new rules will bring the promotion of crypto assets within the scope of financial promotions legislation to ensure they are “fair, clear, and not misleading,” the government explained, elaborating:
The promotion of crypto assets that meet certain criteria will now be subject to FCA regulations. These rules are in accordance with high standards for other financial promotions, such as shares and stocks.
While emphasizing that it is eager to support innovation, the U.K. government noted that “research undertaken by the FCA highlighted the potential for misleading advertising of crypto products to cause consumer harm.”
According to the U.K. Financial Services and Markets Act 2000 a business can’t promote a financial product unless it is authorized by either the Prudential Regulation Authorities (PRA), the FCA, or both.
This gives the Financial Conduct Authority the necessary powers to better regulate the market.
Recent crackdowns by the U.K. Advertising Standards Authority have been made on fraudulent crypto advertisements. In December, the British advertising watchdog banned seven crypto ads for Papa John’s Pizza, Coinbase, Kraken, Etoro, Luno, Coinburp, and Exmo. It cracked down on advertisements for crypto floki inu (FLOKI) during November
Are you a fan of crypto ads brought to the FCA by the U.K.? Please comment below.
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