The UK government has announced plans to introduce new rules for cryptocurrency ads to ensure they are fair, clear and not misleading to consumers. The rules are enforced by the Financial Conduct Authority (FCA).
UK to impose new rules on crypto ads
The UK government on Tuesday announced plans to introduce new rules on cryptocurrency advertising to “protect consumers from misleading claims.” The announcement states:
New regulations will improve consumer protection while encouraging innovation.
UK Chancellor of the Exchequer Rishi Sunak commented: “Crypto assets can offer exciting new opportunities and offer people new ways to transact and invest – but it is important that consumers are not sold products with misleading claims.”
The new rules will bring the promotion of crypto assets within the purview of financial promotion legislation to ensure they are “fair, clear and not misleading,” the government said, stating:
This means that the promotion of qualifying crypto assets is subject to FCA rules, which meet the same high standards to which other financial promotions such as stocks, equities and insurance products are bound.
While emphasizing that it is committed to supporting innovation, the UK government noted that “research conducted by the FCA has revealed the potential for misleading advertising of crypto products that could harm consumers.”
Under the UK Financial Services and Markets Act 2000, a company may only advertise a financial product if it is authorized by the FCA or the Prudential Regulation Authority (PRA) or the content of the advertisement has been approved by a firm which the Government has determined adds:
This gives the Financial Conduct Authority the power to regulate the market more effectively.
Recently, the UK Advertising Standards Authority (ASA) took action against misleading crypto ads. In December, the UK advertising regulator banned seven crypto ads for Papa John’s Pizza, Coinbase, Kraken, Etoro, Luno, Coinburp and Exmo. In November, it cracked down on ads for the cryptocurrency Floki Inu (FLOKI).
What do you think of the UK government bringing crypto advertising under FCA jurisdiction? Let us know in the comment section below.
As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.
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