As the clock ticks toward the implementation of the
crypto asset financial promotions regime on October 8, 2023, the UK’s Financial
Conduct Authority (FCA) has engaged a diverse range of regulated crypto asset
firms to assess their readiness.
According to the
watchdog, some firms have overlooked the broad aspect of financial promotions,
focusing primarily on traditional advertising and neglecting the content of
their digital promotions. According to the
FCA, the definition of
financial promotion is broad, encompassing websites, blogs, mobile apps, and
various forms of content.
The FCA has observed
that compliance with the regime’s territorial scope for firms operating
globally can be a complex challenge. In light of this, the best-prepared firms
have established clear controls, implementing geo-blocking and KYC/AML measures
to prevent UK consumers from accessing promotions intended for other markets.
“The use of social
media to promote financial services, including crypto assets, presents some
particular issues and challenges,” the FCA stated. “In July 2023, we
issued GC23/2 consulting on updated guidance on financial promotions on social
media. We recommend that all crypto asset firms intending to promote to UK
consumers consider this proposed guidance.”
Additionally, the
regulator has found out that some firms aim to boost brand awareness through
sports sponsorship deals, like partnerships with UK-based companies. In light
of this, the FCA has warned that companies should be cautious as any financial
promotion rules also apply to brand advertising beyond specific categories.
Crypto Asset Firms Plan
for Implementation
The UK’s financial
sector authority has also emphasized the need for clear accountability among
crypto asset firms ahead of the new regime. It stated that the
best-prepared firms have designated senior individuals, like CEOs or COOs, with
overall responsibility for compliance
