The financial regulator expressed its frustration at the lack of engagement from cryptocurrency firms in a strongly worded letter. The Financial Conduct Authority (FCA), the United Kingdom’s financial markets regulator, has once again raised worry about the lack of engagement by crypto firms that will soon be subject to new marketing laws. It cautioned that the repercussions of noncompliance could be severe. In a letter dated Sept. 21, the Financial Conduct Authority said it was making a final warning to firms marketing crypto assets to United Kingdom(UK) consumers. The four-page letter first documented the efforts the agency had made to reach out to cryptocurrency firms and attempted to support them as they complied with rules announced on June 8.
The Finance Conduct Authority (FCA) has gone so far as to push back the Oct. 8 compliance deadline to Jan. 8, 2024, “to introduce features that require greater technical development,” and to publish long best practices notes. “Despite our best efforts,” the FCA cannot engage with many unregistered, overseas crypto-asset firms. In fact, just 24 of them answered a survey issued to 150 companies. Firms will need to be proactive in order to comply with the new regime:
According to the Financial Promotion Order, unauthorized and unregistered crypto businesses will only be able to communicate financial promotions that have been approved by an authorized person.
Illegal advertising of crypto assets would have become a crime. Violators would be put on a blacklist, and their promotions might be prohibited or removed from websites, social media platforms, and applications. These intermediaries would also be expected to follow the new system, in accordance with anti-money laundering and counter-terrorism financing legislation, among other things.
The Finance Conduct Authority (FCA) could seek monetary compensation from the violators, and contracts they enter into with UK citizens would not be enforceable, the letter continues. UK consumers are expected to be prevented from responding to promotions made by cryptocurrency asset forms that do not meet the new requirements.