The UK’s Financial Conduct Authority (FCA) has shed light on common
issues plaguing crypto asset promotions. Since the implementation of new
regulations on 8 October, the FCA has been actively monitoring firms and has
identified several areas of concern, including misleading claims and inadequate
risk warnings.
FCA Lists Key Issues in Crypto Marketing
The FCA has
pinpointed three major problems in the marketing of cryptoassets. First,
promotions often tout the ‘safety,’ ‘security,’ and ease of using crypto
services without adequately addressing the associated risks. Second, risk
warnings are frequently obscured by small fonts or non-prominent positioning.
Lastly, firms are not providing sufficient information on the specific risks
tied to the products they are promoting.
Therefore,
the FCA expects companies that approve financial promotions for crypto firms to
adhere strictly to regulatory guidelines. Failure to do so will result in
actions such as restrictions being placed on the offending firm. For example,
the FCA has already imposed restrictions on a firm for not meeting the required
standards in approving crypto asset promotions.
The UK’s Financial Conduct Authority (FCA) has shed light on common
issues plaguing crypto asset promotions. Since the implementation of new
regulations on 8 October, the FCA has been actively monitoring firms and has
identified several areas of concern, including misleading claims and inadequate
risk warnings.
FCA Lists Key Issues in Crypto Marketing
The FCA has
pinpointed three major problems in the marketing of cryptoassets. First,
promotions often tout the ‘safety,’ ‘security,’ and ease of using crypto
services without adequately addressing the associated risks. Second, risk
warnings are frequently obscured by small fonts or non-prominent positioning.
Lastly, firms are not providing sufficient information on the specific risks
tied to the products they are promoting.
Therefore,
the FCA expects companies that approve financial promotions for crypto firms to
adhere strictly to regulatory guidelines. Failure to do so will result in
actions such as restrictions being placed on the offending firm. For example,
the FCA has already imposed restrictions on a firm for not meeting the required
standards in approving crypto asset promotions.
