The UK’s Financial Conduct Authority (FCA) has issued a warning to all cryptocurrency businesses operating in the country, reminding them to be ready for a significant change in advertising rules. The FCA has stated that company officials who violate the new regulations could face up to two years in prison. The new rules are expected to be introduced later this year, although the exact date has not been specified.
The UK finance ministry announced last week that it will be introducing secondary legislation this year to allow crypto companies that adhere to the FCA’s anti-money laundering regulations to advertise their own promotions until new regulations for cryptocurrencies are introduced. The government has also reduced the implementation period for this change from six months to four months.
At present, cryptocurrency advertising must be approved by a firm that has received full FCA authorization. The FCA will now have the power to supervise and enforce anti-money laundering regulations for cryptocurrency businesses promoting cryptocurrencies. This includes the ability to force a company to take down its website if it violates these regulations.
In a statement issued on Monday, the FCA warned that “all cryptocurrency firms marketing to UK consumers, including firms based overseas, will soon need to comply with the new UK financial promotions regime.” The watchdog stressed that companies must start preparing for these changes now, as the FCA will take “robust action against firms breaching these requirements.”
The FCA has also reminded the public that cryptocurrencies remain a high-risk investment, and that consumers should be prepared to lose all their money if they decide to invest in them. The FCA has also stated that there is unlikely to be any compensation available under the Financial Services Compensation Scheme for consumers who lose money as a result of their investments in cryptocurrencies.
This warning from the FCA highlights the need for cryptocurrency businesses to take their responsibilities seriously, and to ensure that they are fully compliant with all regulations. With the UK government taking a strong stance on cryptocurrency regulation, it is crucial that companies take the necessary steps to ensure they are not in breach of the law.
