UK’s FCA Targets Misleading Crypto Promotions, Identifies Key Concerns
The UK’s Financial Conduct Authority (FCA) has called out compliance issues with crypto promotions since new marketing rules took effect on October 8. The FCA says it is taking action against firms illegally promoting crypto.
The regulator highlighted three “common issues” seen in promotions:
- Claims about crypto services being “safe,” “secure,” or easy to use without proper risk disclosures
- Risk warnings in small print, faint colors, or non-prominent positions
- Failure to provide adequate risk information on specific promoted products
FCA asks firms to take regulatory obligations seriously
The FCA said it expects authorized firms approving crypto promotions to take their obligations seriously. It has already restricted one firm from approving promotions.
Other actions the regulator is taking:
- Working with platforms to remove illegal promotions
- Partnering with payment firms to limit exposure to non-compliant marketers
- Continually updating its warning list of firms possibly breaching rules
Furthermore, the FCA is continually updating its public Warning List of firms that may be breaking promotion rules and are not constructively engaging with regulators. The FCA urged consumers to check this list before investing in any crypto assets or services to understand where promotions could be unlawful.
Even with the new marketing regulations in place, the FCA emphasized that crypto assets remain highly risky and largely unregulated. If something goes wrong, it is unlikely that consumers will have access to standard financial protections.
The FCA began overseeing crypto promotions in October to mandate fair marketing and prominent risk disclosures. Under the new rules, all firms promoting crypto assets to UK consumers must be registered or authorized by the regulator, regardless of their geographic location or the technologies used.
The firm had previously spent months warning the crypto industry to prepare for these changes, which are designed to improve consumer understanding and protections around crypto investing.
