The United Kingdom’s Financial Conduct Authority, or FCA, has reiterated its warning for all crypto asset firms marketing to users in the country to be in compliance with rules going into effect in October 2023, but added companies could have “more time to implement certain changes.”
In a Sept. 7 notice, the FCA said crypto firms operating in the U.K. could have until Jan. 8, 2024 to address technical issues related to its financial promotions regime if granted approval. The financial watchdog announced the rules aimed at curbing aggressive marketing by crypto firms in June, saying that companies would have to provide “clear, fair and not misleading” ads or risk criminal charges.
“Crypto firms must market to UK consumers clearly, fairly and honestly,” said FCA consumer investments director Lucy Castledine. “And they must provide risk warnings people understand. As a proportionate regulator, we’re giving firms that apply a little more time to get the other reforms requiring technology and business change right.”
According to the financial watchdog, promotions falling under the compliance regime included “websites, mobile apps, social media posts and online advertising,” which were “capable of having an effect in the UK” and not limited to firms based in the country. The FCA suggested that it could pursue “robust action” against firms, including adding company names to a warning list and requesting removal of social media accounts and websites.
The modification of the enforcement rules, according to a Sept. 7 letter, came in response to crypto firms “not sufficiently considering how certain rules apply to the specifics of the cryptoasset services they provide” as well as significant changes required to be in compliance. Only firms granted approval will have until Jan. 8 — others face an Oct. 8, 2023 deadline.
“We understand the challenges firms have faced in preparing for the financial promotions regime. This will be the first conduct regime for the sector and represents a fundamental change to how cryptoasset activities are regulated in the UK.”
In addition to complying with the FCA’s marketing regime, companies must register with the regulator to “carry out crypto asset activities” in the United Kingdom. At the time of publication, the FCA listed 42 registered crypto firms in compliance with its requirements.