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The UK government has announced plans to implement new rules for cryptocurrency advertising to ensure they are fair, clear and do not mislead consumers. These rules will be enforced by the Financial Conduct Authority (FCA).
UK to implement new rules for crypto ads
The U.K. government on Tuesday announced plans to impose new rules on cryptocurrency advertising to “protect consumers from misleading claims.” The announcement stated:
The new rules will strengthen consumer protections while encouraging innovation.
Rishi Sunak, Chancellor of the Exchequer, commented: “Crypto-assets can offer exciting new opportunities, giving people new ways to trade and invest – but it is important not to sell consumers products with misleading claims.”
The government explained that the new rules will bring the promotion of cryptoassets within the scope of financial promotion legislation to ensure they are “fair, clear and not misleading,” detailing:
This means that promotions of eligible cryptoassets will be subject to FCA rules, to the same high standards as other financial promotions such as stocks, equities and insurance products.
While underscoring its desire to support innovation, the UK government noted that “research conducted by the FCA highlights the potential harm to consumers caused by misleading advertising of crypto products.”
Under the UK Financial Services and Markets Act 2000, businesses cannot promote financial products unless authorised by the FCA or the Prudential Regulation Authority (PRA), or the content of the promotion is approved by the company, the government noted, adding:
This will give the Financial Conduct Authority the appropriate powers to regulate the market more effectively.
More recently, the UK Advertising Standards Authority (ASA) has been cracking down on misleading crypto ads. In December, the UK advertising watchdog banned Seven Crypto Ads Papa John’s Pizza, Coinbase, Kraken, Etoro, Luno, Coinburp and Exmo. In November, it blow Ads about the cryptocurrency floki inu (FLOKI).
What do you think of the UK government putting crypto advertising under the FCA’s jurisdiction? Let us know in the comments section below.
Image Source: Shutterstock, Pixabay, Wiki Commons
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