FCA Sharpens Regulatory Focus
The United Kingdom’s Financial Conduct Authority (FCA) has ratcheted up its regulatory oversight of cryptoasset firms. In letters dated July 4, the FCA announced that all firms marketing to UK users must comply with its financial promotions regime by October 2023. The declaration spotlights the rapidly evolving landscape of digital assets and the increasing urgency for regulatory alignment.
Four Routes to Lawful Communication
In a move to ensure financial integrity and consumer protection, the FCA has defined “four routes to lawfully communicate cryptoasset promotions”. The accepted avenues include having an authorised party approve or communicate a promotion, generating promotions via a business registered with the FCA, or promoting offerings that qualify as exempt under the UK’s Financial Services and Markets Act.
Promotions, as delineated by the FCA, extend to “websites, mobile apps, social media posts and online advertising.” They encompass not only UK-based firms but also any promotional activities “capable of having an effect in the UK.”
Non-Compliance Could Lead to Criminal Charges
Crypto financial promotions lead at the FCA, Jayson Probin, warned in a July 4 LinkedIn post that non-compliance could culminate in criminal charges. The FCA notice echoed his sentiments, stating, “We will take robust action against persons illegally promoting to UK consumers.” Potential repercussions include firm placement on a warning list, requests for promotional take-downs, and enforcement action.
FCA’s Ongoing Regulatory Efforts
The October deadline was first publicised on June 8, with the FCA encouraging crypto firms to foster an approach that allows customers a “cooling-off period” to evaluate the risks of digital asset investment. The FCA warned that it might take up to three months to consider an application once the necessary information has been submitted.
Registration with the FCA is mandatory to “carry out crypto asset activities” in the United Kingdom, and as of this publication, 42 firms, including Bitstamp, Revolut, MoonPay and Galaxy Digital UK, are listed as registered and compliant. The regulator’s persistent efforts illustrate the FCA’s commitment to safeguard consumers amidst the rapid growth of the cryptoasset sector.