The Financial Conduct Authority of the UK might be in charge of regulating certain types of cryptocurrency promotional content
The United Kingdom is discussing proposals to bring crypto ads of certain types under the radar of the country’s Financial Conduct Authority (FCA) to protect consumers from misleading ads. New proposals which were published on the government’s official website on July 20th, suggests that if they are approved, the promotional content of specific types of crypto assets will be under direct regulation from the FCA. This is the first time that ads and other promotional content of any asset have been put under the FCA oversight.
The FCA is the regulator for about 58000 financial services firms and financial markets in the UK.
“It’s important that people can understand the financial products they see promoted. If adverts by unauthorised firms are misleading or don’t fully outline the risks, then people can end up losing money” said the U.K.’s Economic Secretary to the Treasury and City Minister, John Glen.
Presently, The United Kingdom protects consumers’ rights by requiring any unauthorised company to take the approval of an authorised company if it seeks to promote a particular product or asset. However, a new approach is now being considered, as the current requirements might not be able to adequately monitor advertisements amid the proliferation of a variety of new financial instruments. The UK government looks to bring this under the governance of the FCA in order to provide a reliable safeguard against scams and other fraudulent activities.
The proposals obligate authorised firms to receive consent by the FCA before any financial promotions being put forth are authorised. The plans, if approved, are expected to drastically strengthen the financial authority’s direct oversight over prospective financial ads and thus, prevent misleading information from being fed to viewers.
“We want to put more protections in place around such financial promotions, including the promotion of crypto-assets while continuing to ensure people have access to a wide range of products on the market”, the minister added.
The United Kingdom seeks to expand the reach of its financial, promotional regime by including the presently unregulated crypto advertising. The authorities believe that by including certain crypto assets, “their promotion would be held to the same high standards for fairness, clarity, and accuracy that apply to traditional financial services promotions”.
There has been significant progress in the area of crypto regulation for the United Kingdom in the past few months. Recently, the FCA asked crypto firms to register with the financial authorities and set out new rules for them.