FCA issues guidance on compliance with new UK crypto asset promotion rules.
The crypto asset promotion rules that came into effect in the UK on October 8 have caused some confusion given the low level of compliance. The Financial Conduct Authority (FCA) has responded with additional guidance for crypto companies to help them fall online.
On November 2, the FCA issued “non-exhaustive guidance” for crypto companies to comply with regulations. In addition, the regulatory agency responded to industry feedback. The FCA's Director of Consumer Investments, Lucy Castledin, said in a statement:
“While the new rules for companies marketing crypto to UK consumers are in line with existing other high-risk investments, we have engaged extensively with the industry and designed this guidance to ensure compliance by crypto companies.”
The FCA's supportive attitude towards the crypto industry has been reflected in the repeated warnings and reminders it has issued since the new rules were published on June 8. It has extended some technical deadlines until January 8, 2024. Despite these measures, a number of market players have announced their withdrawal from the UK in response to the rules, and compliance has been dismal since their introduction.
Discover the 3 common issues we've identified with #cryptoasset financial promotions.
Consumers should check FCA warning list before making any investment in #cryptohttps://t.co/CKn4cFxb11
— Financial Conduct Authority (@TheFCA) October 25, 2023
The new 32-page directive does not create new obligations for crypto companies, but the authors point out that it reflects a new “secondary objective of global competitiveness” in addition to addressing domestic behavior expectations of companies.
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The guidance section of the text emphasizes the key parts of the laws and other relevant legal documents. The second part provides detailed answers to the questions raised during the consultation.
The UK implemented the Financial Action Task Force's Travel Act on 1 September. Legislation to regulate the stablecoin is expected to enter parliament next year.
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