UK Financial Conduct Authority (FCA) encryption companies About the rules for incoming financial promotion to UK customers.
FCA introduced these rules on June 8 Given that crypto ownership in the UK doubled from 2021 to 2022, with a survey revealing that 10% of the 2,000 respondents own one form of crypto asset or the other.
Compliance tracks FCA’s list of cryptocurrency marketing companies
The new financial promotion regime is expected to come into effect from October 8, 2023, as the FCA makes the necessary preparations, including the letter sent today to crypto companies.
In this letter, the UK’s FCA states that the new rules apply to all businesses, domestic or foreign advertising digital assets of UK citizens. The rules will be effective for foreign companies even if the UK is only part of the target.
The Financial Conduct Authority has listed the four ways crypto companies can legally deliver any financial promotion to UK customers.
According to the FCA, a Financial upgrade Any “invitation or inducement to engage in investment activity or to engage in claims management activity that is reported in the course of business.”
From October 8, 2023, promotions for crypto assets will be sent by an authorized person or an unauthorized person but with the approval of an authorized person.
In this context, a authorized person Refers to an individual who has permission to carry out a Regulated Activity under Section 31 of the FCA Handbook.
FCA-registered Cryptocurrency companies may also post financial promotions under UK Money Laundering, Terrorist Financing and Money Transfer Act 2017.
Finally, the new financial regime will also allow promotions that meet exemption criteria based on the Market for Financial Services Act 2000 (Financial Promotion) Order 2005.
According to the FCA, making any financial promotion outside of these options would be a criminal offense that carries a penalty of up to two years in prison, an unlimited fine, or both.
Crypto Total Market Cap Valued At $1.12 Trillion On The 15-Minute Chart | Source: TOTAL Chart On Tradingview.com
The Financial Conduct Authority (FCA) is warning unregistered crypto firms to prepare for the new regime
In its letter today, the FCA also stated that unregistered crypto firms must start preparing before October 8, 2023.
The UK Financial Regulatory Authority has stated that these companies should explore which of the four paths for promotions they intend to employ, ensuring that they can match all requirements of the chosen path.
Moreover, suppose that unregistered crypto-asset companies cannot identify any of the legal methods of financial promotion. In this case, the FCA requires them to communicate effectively with their UK clients if there are changes to the service and provides sufficient time to make adjustments.
Finally, if these companies finish closing their UK market ahead of the new financial regulations, they must put in place “structured liquidation schemes” aimed at minimizing negative impacts on their customers.
Featured image: Unsplash, chart from Tradingview.
