UK Watchdog, FCA, Sets Tougher Rules for Crypto Advertisers and Bans Referral Bonuses

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The Financial Conduct Authority (FCA) has announced new regulations that compel crypto advertisers in the UK to give first-time investors a “cooling-off period” and scrap referral bonus offerings.

Crypto Advertisers Face Tough New FCA Rules in the United Kingdom

The Financial Conduct Authority (FCA) in the UK has released a new set of rules that will regulate the marketing of crypto assets starting from October 8, 2023.

The FCA issued an official press release and a summary on Twitter on Thursday, June 8, stating that these rules will require crypto firms to ensure that new investors have adequate knowledge of the industry.

The FCA also emphasized the need for transparent risk warnings in advertisements and prohibited the promotion of misleading information.

Additionally, starting from October 8, 2023, anyone marketing crypto assets to consumers in the UK must provide a “cooling-off” period for new investors.

The new rules also explicitly clarified that all refer-a-friend bonuses would be banned from October 8 as part of the new measures designed to safeguard newbie investors.

The FCA explained that the ban on referral bonuses would ensure that anyone buying crypto assets for the first time understands the risk involved without any inducement.

Sheldon Mills, the executive director of Consumers and Competition for FCA, emphasized the decision to buy crypto ultimately rests with the individual.

However, research shows that many people usually regret making hasty decisions.

Stressing further, Mills highlighted that the new FCA rules aim to provide individuals with sufficient time and clear risk warnings to make informed decisions about crypto.

Additionally, he disclosed that the FCA is working on giving additional guidance to help crypto firms meet the new expectations and regulations.

FCA’s New Tough Rules on UK Crypto Firms Clash With Recent SEC Crackdown on US Crypto Exchanges

Amidst the FCA rolling out new tough rules on Crypto adverts in the UK, a similar watchdog in the United States is also cracking down on two of the biggest U.S.-based crypto exchanges.

On June 5, the popular crypto exchange Binance.US announced on Twitter that the US Securities and Exchange Commission (SEC) filed civil claims against the company.

Binance.US said in the Tweet that the SEC lawsuit is another example of “regulation by enforcement” under the current SEC commission. The company also described the lawsuit as a “baseless” one.

On June 6, Bloomberg also published a report revealing that the largest U.S.-based crypto exchange, Coinbase, has been sued by the US Securities and Exchange Commission (SEC) for breaking US securities rules.

On the same day, the co-founder and CEO at Coinbase, Brian Armstrong, took to his verified Twitter page to confirm the SEC lawsuit against the company.

He stated in the long tweet that Coinbase would proudly represent the crypto industry in court by clarifying crypto rules.

Brian claimed that the SEC had initially reviewed Coinbase business before allowing the company to go public in 2021.

The recent introduction of stricter rules by FCA regarding crypto adverts and the SEC crackdown on US crypto exchanges conflict with Bybit’s announcement of their expansion to Kazakhstan.

Bybit is one of the largest crypto exchanges globally, although it is not accessible in certain areas such as the USA, Canada, mainland China, and Russian-controlled regions of Ukraine.

Ben Zhou, the co-founder of Bybit, shared the news of their expansion to Kazakhstan on June 7 through a tweet featuring an image of the company’s new license approved by AFSA Kazakhstan.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.