The British Financial Conduct Authority (FCA) approved stricter rules to combat misleading advertising, but spared cryptocurrencies.
The rules apply to all investment products with a high degree of risk, but so far they do not apply to the promotion of crypto assets. The regulator is waiting for the UK government to legislate to expand the powers of the FCA and allow regulation of cryptocurrency marketing. Once this is done, the FCA will expand the rules to include crypto advertising:
“The rules for digital assets will follow the same vector as the rules for high-risk assets. Cryptocurrencies are still high-risk investment products, so people should be prepared to lose their money if they decide to invest in crypto assets.”
New, stricter rules for risky investment products require companies that produce marketing materials to have relevant experience. In some cases, they will have to make sure that advertising does not mislead consumers and potential customers understand the full extent of the responsibility.
However, some investment incentives, such as refer-a-friend bonuses, will be banned, and advertisers will have to use clearer and more visible risk warnings, Sarah Pritchard, chief market officer of the FCA, makes clear:
“We try our best to help consumers better understand the risks, but asset providers themselves have an important role to play. We are ready to act if we see an advertisement in which the essence of the product is explained in vague language.
Earlier, FCA Chairman Nikhil Rathi said that most crypto companies support the regulation of the industry, as it gives a sense of certainty.
Source: Bits
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