The UK’s Financial Conduct Authority (FCA) Introduces New Regulations for Cryptoasset Promotions
The FCA has issued a letter to cryptoasset firms regarding a new financial promotions regime that will be enforced from 8 October 2023. The regulation requires all entities marketing cryptoassets to UK consumers to adhere to the new regime. Here are the key points:
- Four legal pathways have been defined for cryptoasset promotions to UK consumers to be lawfully communicated.
- Promotions not following these pathways will violate section 21 of the Financial Services and Markets Act 2000 (FSMA) and will be considered criminal offences.
- The FCA has released a Policy Statement and a Guidance Consultation to clarify the standards required for financial promotions.
- Cryptoasset firms marketing to UK consumers are encouraged to be ready for the new regime by 8 October 2023.
- The main method for communication is expected to be through registration with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Hot Take: The FCA’s new regulations aim to protect UK consumers from misleading or unfair cryptoasset promotions. It is crucial for cryptoasset firms to familiarize themselves with the four legal pathways and ensure compliance to avoid penalties and legal consequences.
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