The Financial Conduct Authority gave crypto firms marketing to UK customers a “final warning” ahead of the financial promotion regime implementation.
The regime comes into effect on Oct. 3.
“All firms marketing crypto assets to UK consumers, including firms based overseas, must comply with this regime,” a letter from the FCA stated.
The FCA published a post detailing good and bad practices on Sept. 9.
“It is up to consumers to decide whether they buy crypto assets, but they should do so based on fair and accurate information that helps them make effective investment decisions,” the FCA said. As part of the
The Sept. 21 letter comes as the FCA expresses concern about the “poor engagement from many unregistered, overseas crypto asset firms who have UK customers…”
The letter also said that the firms “refused to engage with the FCA” despite efforts, and “only 24 firms responded to a survey that was sent to over 150 firms.”
Read more: UK proposes bringing crypto under regulatory eye
Once the regime is in place, unregistered firms caught violating the law could face “up to 2 years imprisonment, an unlimited fine, or both.”
As part of the new framework, crypto companies are expected to make their marketing fair and accurately labeled with risk warnings. Campaigns that engage in incentive schemes are prohibited, such as marketing that uses a refer-a-friend bonus.
The regulations establish four legal avenues to market to UK customers, which include both qualifying for exemptions and regulatory approval.
“From this October, crypto firms must market to UK consumers clearly, fairly and honestly. And they must provide risk warnings people understand,” said Lucy Castledine, director of consumer investment, in a statement.
However, in early September, the regulator said that there was a possibility that some firms could be given until Jan. 8 of next year “to introduce features that require greater technical development.” Firms are required to submit an application for flexibility, and they must be registered or authorized with the FCA.
Earlier this week, the former chair of the FCA alluded to politicians pushing for crypto firms to enter the market and insinuated that the regulator should have been more cautious.
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