In an effort to enhance customer protection in the UK, the Financial Conduct Authority (FCA) introduced a new set of stringent regulations to take place in October. In response to industry feedback however, the FCA has expressed willingness to to give crypto asset firms additional time to enact certain changes. Firms could have until 8 January to implement features that require significant technical development.
The changes aim to make the crypto market more transparent and accountable by protecting consumers from misleading promotions or incentives. To receive an FCA extension on the deadline, registered and authorised firms can apply for the flexibility.
For the rest, starting on 8 October, any and all firms – including those overseas – marketing crypto assets to UK customers will need to abide by new measures, including clear and fair risk warnings to investors. There will also be a crackdown on inappropriate incentives to invest, such as “refer a friend” bonuses.
If firms breach the regulations, it will be considered a criminal offence, punishable by an “unlimited fine” or up to two years in prison, according to the FCA.
These rules apply to firms wherever they are based globally and help strengthen how people are protected from the high risks associated with crypto assets.
“We’re giving firms that apply a little more time to get the other reforms requiring technology and business change right. We’ll maintain our close eye on firms during this extended implementation period,” said Lucy Castledine, director of consumer investments at the FCA.
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“From this October, crypto firms must market to UK consumers clearly, fairly and honestly. And they must provide risk warnings people understand.
“We are concerned by the failure of many overseas and unregulated crypto firms to engage with us on the new rules. Come 8 October, we will be taking action against firms illegally marketing to UK consumers.”
The FCA will “soon” release the final guidance and clarification for firms on the clear, fair and non-misleading marketing on crypto assets.
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