Crypto-promoting Firms Breach UK Marketing Rules Over 200 Times
According to the UK Financial Conduct Authority (FCA), firms promoting cryptocurrencies have violated the country’s new crypto marketing regulations at least 221 times since early October. The FCA stated that these firms have failed to provide adequate risk warnings and information about the risks involved in cryptocurrency investments. They have also made claims about the safety, security, and ease of using crypto without highlighting the associated risks.
The FCA had previously issued 146 alerts regarding breaches of the new rules within 24 hours of their implementation. While some alerts were related to illegitimate schemes promising high returns on crypto investments, legitimate businesses have also faced restrictions. For instance, Binance partnered with Rebuildingsociety to comply with the FCA’s rules, but the FCA placed restrictions on Rebuildingsociety, leading Binance to halt onboarding new UK users.
Collaboration with Various Platforms to Stop Banned Promotions
The FCA stated that it is working with social media platforms, app stores, search engines, domain name registrars, and payment providers to remove, block, and prevent funds from flowing into banned promotions. The new regulations require that only FCA-authorized or regulated firms can promote or approve crypto-related ads. These promotions must include prominent risk warnings and should not incentivize investing in cryptocurrencies. Referral bonuses and memes commonly used in overseas markets are restricted and prohibited in the UK as well.
Hot Take: Stricter Regulations Aim to Protect Investors
The increasing number of breaches of the UK’s new crypto marketing rules highlights the need for stricter regulations in the industry. By cracking down on misleading promotions and ensuring that investors are aware of the risks involved in crypto investments, the FCA aims to protect consumers from potential financial harm. Collaborating with various platforms to remove banned promotions also demonstrates the FCA’s commitment to creating a safer environment for crypto investors in the UK.
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