The U.K.’s tough new rules for advertising crypto have firms rushing – and even struggling – to comply. More rules planned for ad approvers augur further trouble for companies looking to draw local customers.
Local regulators require firms to be admitted to the country’s crypto register to be able to approve their own communications or – failing that – have their ads approved by authorized firms.
It sounds pretty straightforward, but in reality, firms with the right powers aren’t easy to come by. Binance exchange, for instance, teamed up with a U.K. firm called Rebuildingsociety.com to have its promos approved, but the country’s financial watchdog slapped the local firm with new restrictions in October limiting its ability to approve crypto-related communications. As a result, Binance announced it won’t be taking on any new U.K. clients until it finds an authorized ad approver.
Now, as much as 10 crypto businesses including Coinbase and OKX are relying on exchange platform Archax to approve their ads in the U.K. But even Archax’s future as a crypto promotions approver is not guaranteed.
Archax can only temporarily approve crypto ads for other companies while it applies for the Financial Conduct Authority’s (FCA) permission to continue approving. It can apply for this authorization within three months starting Nov. 6. Should the regulator reject Archax’s application, companies that are relying on it for ad approvals will be forced to find alternative means of complying.
“Everyone is in the same state as us. We’re all applying and we’re all allowed to provide the service while we apply,” said Simon Barnby, Archax’s chief marketing officer, in an interview with CoinDesk. “If at the end of it, someone passes then that’s all well and good and if someone doesn’t, then they would have to stop providing the service.”
Authorization not enough
Archax was one of the first companies to get on the FCA crypto register in 2020 and it received authorization from the regulator as an exchange, broker and custodian for tokenized and traditional assets.
Although the FCA has previously said authorized entities can approve crypto ads, this didn’t prove enough in the case of Binance’s ad approver. Rebuildingsociety.com…
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