UK Financial Watchdog Flags “Common” Failures in Crypto Marketing
The Financial Conduct Authority (FCA) has identified some recurring issues in the marketing of cryptoassets following the implementation of new regulations on October 8.
In a Wednesday blog post, the FCA highlighted three primary problems, which include misleading claims regarding safety and security, insufficient risk warnings, and the failure to emphasize product-specific risks.
The FCA said that since the introduction of the new rules, it has issued more than 200 alerts against firms suspected of illegally promoting cryptoassets.
“Since the regime went live, we have issued 221 alerts. This list will be continually updated as we identify firms that may be illegally communicating cryptoasset promotions and are failing to engage with us constructively.”
Furthermore, the agency has imposed restrictions on one authorized firm that approved crypto promotions falling short of the required standards.
In addition to working with crypto firms, the FCA is collaborating with various third parties, including social media platforms, app stores, and payment providers, to combat illicit promotions and mitigate consumer exposure.
The FCA called upon these entities to review the alerts it has published and play an active role in safeguarding UK consumers.
The FCA emphasized that despite the new regulations, cryptoassets remain highly risky investments and are not subject to regulation.
“If something goes wrong, it is unlikely people will have access to consumer protections, so should be prepared to lose all their money,” the regulator wrote.
The new FCA rules, implemented earlier this year, require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
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