- Financial Conduct Authority has introduced new marketing rules for crypto firms in the United Kingdom.
- To prevent impulse purchases, first-time cryptocurrency investors will get a 24-hour cooling period.
- Cryptocurrencies will be classified as restricted mass market investments under the FCA’s new rules.
- The new rules will take effect on October 8 and prohibit crypto firms from promoting schemes such as “refer a friend.”
In the interest of consumer safety, the United Kingdom‘s Financial Conduct Authority has issued a set of guidelines prohibiting crypto companies in the country from engaging in certain marketing methods. According to the new guidelines, which are slated to go into effect on October 8, 2023, the regulator stated that it will treat cryptocurrency as a high-risk investment.
New Crypto Investors To Be Restricted From Trading In The First 24 Hours
According to Reuters, bitcoin will be categorized as restricted mass market assets under the Financial Conduct Authority’s new rules. The new classification will necessitate clear risk warnings in crypto ads and marketing initiatives. The United kingdom (UK) regulator will also prohibit marketing promotions such as “refer a friend,” which rewards crypto users for bringing their friends to the site to buy crypto.
The FCA’s new guidelines would also necessitate a 24-hour “cooling off” period for first-time crypto investors before creating trading accounts. Through this guideline, the regulator hopes to deter inexperienced traders from making impulse crypto purchases. The new crypto rules are identical to those presently enforced by the financial authority on high-risk traditional finance investments.
Su Carpenter, operations director of CryptoUK, claimed that her company supported the FCA’s decision to impose a cooling-off period but questioned the length. Cryptocurrency United Kingdom is a self-regulatory trade group for the United Kingdom’s crypto business. The trade association stated that it was looking forward to evaluating evidence-based findings on the reason for the planned 24-hour cooling-off time.