Tighter regulations governing how cryptoassets are marketed to UK consumers will come into force next month, Britain’s Financial Conduct Authority confirmed this week. However, companies may seek more time to implement certain complex requirements.
The FCA said the sweeping new standards, confirmed in June, will commence in early October to better protect investors from risks in the highly volatile crypto sector. They mandate clearer disclosure and ban incentives like “refer a friend” bonuses.
The rules will apply to any firm worldwide marketing cryptoassets to customers in Britain. However, the regulator admitted some overseas entities are not engaging on how to comply. It warned of penalties for non-cooperation when the regime takes effect.
While the core rules kick in next month, the FCA said companies can request an extension to January 2024 for technically challenging elements like a 24-hour cooling-off period before new client accounts are opened.
Other measures taking effect from October include risk warnings that crypto investments are high-risk and investors should be prepared to lose all money spent. Marketing communications must also be clearly identifiable as such.
The FCA said firms should proactively apply for flexibility where extra time is needed to implement complex requirements successfully. Cryptoassets remain high-risk and volatile, it reiterated.
Analysts said the new standards would lift Britain’s regulatory safeguards around crypto to the most comprehensive globally. The crackdown comes as authorities ramp up oversight after failures at firms like FTX last year.
While supporting innovation, the FCA hopes to cement the UK’s reputation as a responsible destination for the crypto sector. But it requires industry players to fully comply with the marketing overhaul that begins next month.
