The Financial Conduct Authority (FCA) in the United Kingdom has issued a reminder to all cryptoasset firms operating in the country that they must comply with its financial promotions regime by October 2023. In letters dated July 4, the FCA outlined the four allowable methods for lawfully communicating cryptoasset promotions.
Starting from October 8, companies in the UK have only four routes to legally promote their cryptoassets. These options include obtaining approval or communication of a promotion from an authorized party, having a promotion created by a business registered with the FCA, or ensuring that the promotion qualifies as exempt under the Financial Services and Markets Act in the UK.
The FCA clarified that promotions encompass various channels such as websites, mobile apps, social media posts, and online advertising, which could potentially impact individuals in the UK. This requirement applies not only to firms based in the UK but also to those outside the country.
Jayson Probin, the FCA’s crypto financial promotions lead, warned that failure to comply with these regulations may result in criminal charges. The FCA emphasized that it will take strong action against individuals or companies illegally promoting to UK consumers. Measures could include placing firms on warning lists, requesting takedowns of non-compliant websites, social media accounts, apps, and other promotional materials, as well as enforcement actions.
The FCA initially announced this October deadline on June 8, urging crypto firms to adopt marketing approaches that allow customers a “cooling-off period” to evaluate the risks associated with investing in digital assets. Upon submission of the necessary registration information, the FCA estimates a processing time of up to three months for each application.
In addition to adhering to the marketing regime, crypto firms must also register with the FCA to conduct crypto asset activities in the UK. As of now, there are 42 registered crypto firms in compliance with the FCA’s requirements, including industry players such as Bitstamp, Revolt, MoonPay, and Galaxy Digital UK.
By imposing these regulations, the FCA aims to establish a more robust framework for the crypto industry within the UK. This ensures that digital asset promotions are conducted lawfully and allows consumers to make informed decisions about their investments.
As the deadline approaches, crypto firms operating in the UK should take immediate steps to align themselves with the FCA’s regulatory requirements to avoid potential legal consequences and protect the interests of investors and consumers alike.