The U.K. government has announced plans to impose new rules on cryptocurrency ads to ensure they are fair, clear, and not misleading to consumers. The rules will be enforced by the Financial Conduct Authority (FCA).
UK to Impose New Rules on Crypto Ads
The U.K. government announced Tuesday plans to impose new rules on cryptocurrency advertisements to “protect consumers from misleading claims.” The announcement states:
New rules will increase consumer protection while encouraging innovation.
The U.K. chancellor of the exchequer, Rishi Sunak, commented: “Crypto-assets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims.”
The new rules will bring the promotion of crypto assets within the scope of financial promotions legislation to ensure they are “fair, clear, and not misleading,” the government explained, elaborating:
This means the promotion of qualifying crypto assets will be subject to FCA rules in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to.
While emphasizing that it is eager to support innovation, the U.K. government noted that “research undertaken by the FCA highlighted the potential for misleading advertising of crypto products to cause consumer harm.”
Under the U.K. Financial Services and Markets Act 2000, a business cannot promote a financial product unless they are authorized by the FCA or the Prudential Regulation Authority (PRA), or the content of the promotion is approved by a firm which is, the government noted, adding:
This will provide the Financial Conduct Authority with the appropriate powers to regulate the market more effectively.
Recently, the U.K. Advertising Standards Authority (ASA) has been cracking down on misleading crypto ads. In December, the British advertising watchdog banned seven crypto ads for Papa John’s Pizza, Coinbase, Kraken, Etoro, Luno, Coinburp, and Exmo. In November, it cracked down on ads for cryptocurrency floki inu (FLOKI).