The U.K. Financial Conduct Authority (FCA) warned crypto companies to comply with the country’s new financial promotions regime or face up to two years imprisonment, according to a Feb. 6 statement.
The FCA said its crypto promotions regulations would be similar to those guiding other high-risk investments. According to the regulator, crypto promotions must be “clear, fair, and not misleading.”
It added that crypto firms would be required to “use specific risk warnings and positive frictions” like a 24-hour cooling-off period that allows investors to cancel their investments.
The financial regulator noted that while the regulations are still subject to parliamentary approval, crypto promotions can only be communicated or approved by an FCA-authorized person or a business registered with the agency.
The FCA wrote that crypto firms targeting U.K. consumers must prepare for this regime. It added that early preparations would allow these firms to continue promoting crypto to U.K. consumers legally.
Aside from the FCA, another U.K. agency working to clamp down on misleading crypto ads is the Advertising Standards Authority. In 2022, the body brought several enforcement actions against firms with misleading ads.
Meanwhile, the U.K. government has continued with plans to turn the country into a crypto hub. The authorities want to extend regulations to cover crypto exchange’s operations.
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