The UK's Financial Conduct Authority (FCA), the regulatory authority for financial markets, has once again expressed concern regarding the lack of cooperation from cryptocurrency companies in adhering to new marketing rules that will soon come into effect. The FCA issued a stern warning, emphasizing that non-compliance could lead to severe consequences.
In a letter dated September 21, the FCA announced that it was issuing a final warning to companies engaged in marketing crypto assets to consumers in the UK. The four-page letter outlines the regulator's efforts to engage with cryptocurrency firms and assist them in complying with the regulations introduced on June 8.
The FCA even extended the compliance deadline from October 8 to January 8, 2024, to accommodate companies requiring additional time for technical developments and published comprehensive guidance on best practices. However, the letter notes that despite these efforts, numerous unregistered overseas crypto asset companies have been uncooperative. Out of 150 companies targeted by the FCA, only 24 responded to the survey conducted by the regulator.
To adhere to the new regulatory framework, companies must proactively take steps. Once the regime is in effect, unauthorized and unregistered cryptocurrency businesses will only be allowed to disseminate financial promotions that have been approved by an authorized entity or fall within specific exemptions outlined in the Financial Promotions Order. Illegally promoting crypto assets will be considered a criminal offense. Violators will be placed on a warning list, and their promotions may be blocked or removed from websites, social media platforms, and apps. These intermediaries will also need to comply with anti-money laundering and counter-terrorism financing regulations and other regulatory measures.
Furthermore, the FCA warned that it may seek financial penalties against offenders, and contracts with British citizens may become unenforceable for these non-compliant firms. Crypto asset entities failing to meet the new requirements are expected to take measures to prevent UK consumers from engaging with their promotions.
