Crypto Firms Push Boundaries: 221 Violations of UK's New Promo Rules

Crypto Firms Push Boundaries: 221 Violations of UK's New Promo Rules

The concept of decentralization within the realm of blockchain and cryptocurrencies has been notably responsible for numerous breaches of regulatory norms. In the United Kingdom, crypto-promoting enterprises have repeatedly violated the new crypto marketing regulations, with the country's financial regulator reporting a total of 221 such infractions since these rules were introduced in early October.

As of an official statement released on October 25, the U.K. Financial Conduct Authority (FCA) has underscored the persistent issue of firms failing to provide sufficiently visible risk warnings, furnish comprehensive risk-related information, and promoting crypto as safe, secure, or easy to use without adequately addressing the associated risks.

This latest tally of warnings from the FCA comes after the regulator revealed on October 9 that it had issued 146 alerts regarding violations of the new rules within the first 24 hours following their implementation.

It's essential to note that although a significant portion of the FCA's alerts regarding cryptocurrency seem to target fraudulent schemes promising substantial returns on crypto investments, the FCA has also initiated actions against seemingly reputable businesses.

In an announcement on October 10, the Financial Conduct Authority (FCA) restricted the activities of Rebuildingsociety, a company partnered with Binance to ensure compliance with the FCA's new marketing and communication rules. As a result, Binance stopped accepting new users from the UK.

The FCA emphasized that it expects authorized firms responsible for approving crypto-related promotional materials to take their regulatory obligations seriously. It also stated that it would take action when these obligations are not met. The FCA is actively working with social media platforms, app stores, search engines, domain name registrars, and payment providers to prevent the circulation of banned promotions and the flow of funds.

Under these new regulations, only FCA-authorized or regulated firms are allowed to endorse cryptocurrency-related advertisements. These rules apply to all businesses, even those without a physical presence in the UK.

Also Read: JPMorgan's TCN: Efficient Collateralization on Blockchain

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