The cryptocurrency promotion rules that took effect in the UK on October 8 have encountered a lack of compliance, leading to some confusion among crypto asset firms. In response, the Financial Conduct Authority (FCA) has offered additional guidance to assist these companies in adhering to the rules.
On November 2, the FCA released "final non-manual guidance" regarding compliance with the regulations for cryptocurrency businesses, accompanied by the regulator's feedback in response to industry input. Lucy Castledine, the FCA's consumer investment director, explained that while the new regulations for firms marketing cryptocurrencies to UK consumers are consistent with existing rules for other high-risk investments, they have designed this guidance to support cryptocurrency companies in specific compliance efforts.
The FCA had issued multiple warnings and reminders since unveiling the new regulations on June 8, illustrating its supportive stance towards the crypto industry. It even extended certain technical deadlines to January 8, 2024. However, despite these measures, some market players have announced their exit from the UK, and compliance has been less than optimal since the rules came into force.
The newly published 32-page guidance doesn't introduce new obligations for cryptocurrency firms but aims to guide them in understanding the rules and addresses concerns raised during the consultation phase. It underscores the FCA's intention to align domestic conduct with "secondary international competitiveness objectives" to ensure the industry complies with regulatory standards. Furthermore, the UK adopted the Financial Action Task Force's travel rules on September 1, and it's expected that legislation to regulate stablecoins will be introduced in Parliament in the coming year.
