The FCA (Financial Conduct Authority, UK) has recently announced new rules for marketing cryptoassets.
The new rules will take effect from 8 October 2023 and aim to ensure that people have the appropriate knowledge and experience to invest in crypto, and that they understand the risks involved.
Research from the FCA shows that the estimated crypto ownership has more than doubled from 2021 to 2022, with 10% of the 2,000 people surveyed stating that they own crypto.
https://www.fca.org.uk/news/press-releases/fca-introduces-tough-new-rules-marketing-cryptoassets
The new rules include:
- A cooling-off period for first time investors, during which they can change their mind and cancel their purchase.
- A ban on ‘refer a friend’ bonuses, which may incentivise people to invest in crypto without due diligence.
- Clear risk warnings and fair and not misleading adverts, which must disclose the volatility, lack of regulation, and potential for loss of cryptoassets.
The new rules follow government legislation to bring crypto promotions into the FCA’s remit and are consistent with the FCA’s previous rules on high-risk investments.
The new rules also support the FCA’s core commitments to reduce and prevent serious harm, set and test higher standards, and promote competition and positive change.
The FCA is also consulting on additional guidance for firms advertising crypto to UK consumers and invites feedback until 10 August 2023.
You can read the official FCA press release here:
https://www.fca.org.uk/news/press-releases/fca-introduces-tough-new-rules-marketing-cryptoassets
Yield Reviews Opinion:
An interesting part of this article is that the FCA research has shown that estimated crypto ownership has more than doubled from 2021 to 2022. This increasing popularity of crypto products is good news for the industry and wider utility of crypto products. With crypto becoming increasingly popular, it is important that there are measures in place to inform investors of the risks of crypto.
