FCA Reminds Crypto Firms of the October Deadline for Compliance
- The FCA plans to take legal action against companies that fail to comply with its rules.
- The UK watchdog noted that the notice applies to both local and foreign businesses whose marketing strategy affects UK residents.
- The UK has made huge improvements in its bid to provide clear rules governing crypto activities.
The UK’s Financial Conduct Authority (FCA) has noted that companies advertising cryptocurrency services must adhere to laid-down financial promotion rules by October 8, 2023. The financial watchdog said companies operating in the United Kingdom will have only “four routes to lawfully communicate cryptoasset promotions” to be fully compliant with its rules.
According to the notice, these organizations must either have a promotion approved or communicated by an authorized party or a promotion developed by a company registered with the FCA. Another option includes having a promotion that is exempt under the UK’s Financial Services and Markets Act.
Financial promotion, according to the FCA, spans a wide range of technologically unrestricted areas and applies to online advertisements, social media posts, mobile apps, and website content.
The FCA also stated that it will target domestic as well as foreign businesses, adding that if a company’s marketing strategy in any way affects British customers, it will be subject to their oversight.
Possible Legal Action
Jayson Probin, the FCA’s lead for crypto financial promotions, warned in a LinkedIn post that businesses that fail to comply with these measures could face legal action. In its notice today, the FCA said it would take “robust” actions against companies illegally promoting crypto services.
The financial regulator noted that some possible steps may include “placing firms on our warning list, requesting takedowns of websites, social media accounts, apps, and all other promotions that are in breach, and enforcement action.”
The announcement also notes that all companies must apply for registration and might have to wait 3 months to receive a response from the FCA. In addition, approved companies would be required to pay a fee. The FCA also asked companies to provide details on their responses to the notice. These companies have until August 4 to respond to the request.
The UK has been tirelessly attempting to provide a clear set of regulations for cryptocurrency businesses, including a new law that governs crypto trading. Today’s notice comes almost a month after the FCA urged crypto companies to adopt a marketing strategy that gives clients a “cooling-off period” to evaluate the potential risks of investing in cryptocurrencies.
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