The UK Financial Conduct Authority (FCA) Warns Crypto Businesses to Comply with New Rules
The Financial Conduct Authority (FCA) in the United Kingdom has issued a warning to crypto businesses, urging them to adhere to new financial promotion rules. However, it seems that the majority of these businesses are ignoring the warning. Out of over 150 firms surveyed by the FCA, only 24 have responded. The new rules, which will take effect next month, will impose strict limitations on how “unauthorized and unregistered crypto businesses” can communicate financial promotions.
The FCA expressed concern over the lack of engagement from overseas crypto asset firms that have UK customers. Once the rules come into effect on October 8, crypto firms must stop making illegal financial promotions to UK consumers. Failure to comply could result in punishments such as imprisonment or fines.
The rules specifically prohibit unauthorized crypto firms from sharing promotions with UK customers that encourage them to invest in crypto assets. Communications are limited to purely factual information and instructions for existing customers on how to manage their assets.
Guidelines Extend to Apps and Social Media
The FCA’s guidelines also extend to communications made through apps and social media platforms. In July, the FCA published guidelines stating that even crypto memes could violate its promotion rules.
Last week, rumors circulated that Bybit, a crypto exchange, was planning to leave the UK due to the challenges of complying with these regulations. Bybit’s CEO clarified that compliance remained a top priority but no final decision had been made regarding the company’s future in the region.
Firms Associated with Non-Compliant Ads Also Face Scrutiny
The FCA is not only targeting non-compliant ads but also companies associated with them, including social media platforms, search engines, app stores, and payment companies. These entities may be held liable for money laundering offenses if they are connected to unregistered crypto firms.
The FCA concludes its statement by advising firms to consider their position if they believe they will be in breach of the rules once they come into force.
Hot Take: Crypto Businesses in the UK Must Act Now to Comply with FCA Rules
The Financial Conduct Authority (FCA) has issued a stern warning to crypto businesses in the UK, urging them to comply with new financial promotion rules. However, it appears that many of these businesses are not taking the warning seriously, as only a small fraction have responded to a survey sent by the FCA. The new rules, which will be enforced from next month, impose strict limitations on how unauthorized and unregistered crypto businesses can communicate financial promotions. Failure to comply with these rules could result in severe punishments, including imprisonment and fines. Therefore, it is crucial for crypto businesses to take immediate action to ensure compliance with the FCA’s regulations.
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