Tuesday, 18 January 2022 00:00
Government plans crackdown on crypto adverts
The government plans to legislate to protect consumers from misleading crypto asset adverts.
The Treasury has confirmed plans to bring cryptoasset promotions within the scope of financial promotions legislation.
In a response to an FCA consultation on the subject, the Treasury said that it was eager to support cryptocurrency innovation but there was a potential for consumer harm due to misleading adverts.
It confirmed that it will make amendments to the Financial Services and Markets Act 2000 to include cryptocurrency within the range of financial products which cannot be promoted unless the business is authorised by the FCA or PRA.
The promotion of most cryptoassets will become subject to the same FCA rules applied to investment, savings and insurance products.
Chancellor Rishi Sunak said: “Cryptoassets 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.
“We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.”
The government intends to put in place a transition period of approximately six months from both the finalisation and publication of the proposed Financial Promotion Order regime and the complementary FCA rules.
There is currently a debate about whether regulators need to regulate cryptocurrencies.
The FCA has a limited role in registering UK-based cryptoasset exchanges for anti-money laundering purposes.
The regulator has published a list of unregistered crypto exchanges that it suspects are operating in the UK to help consumers avoid using them.
Where digital tokens are used to constitute or represent investments that the regulator already regulates, like shares and bonds, it addresses them in the same way as for investments that are not tokenised.
This page is available to subscribers. Click here to sign in or get access.