UK regulators are taking a tougher stance against crypto scams, warning “finfluencers” against promoting get-rich-quick schemes and other risky investments. The Financial Conduct Authority (FCA) and Advertising Standards Authority (ASA) have collaborated to launch a campaign aimed at preventing influencers from recommending unsafe financial products.
The two agencies have released a checklist that influencers can use to ensure that they follow the rules when promoting investments. The FCA’s executive director of markets, Sarah Pritchard, commented on the campaign, stating, “We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky.”
The FCA and ASA have been cracking down on unlawful advertising in the crypto market. In February, the FCA issued a notice regarding crypto promotions, stating that such promotions must be accompanied by an FCA-authorised person, among other requirements.
Regulation of crypto promotions is necessary to protect consumers, but excessive regulation can also harm the sector. False or misleading crypto ads can lead to financial losses for consumers, while too much regulation can stifle innovation and limit the growth of the crypto industry.
In the US, the New York Department of Financial Services (NYDFS) has also taken steps to regulate crypto ads. In 2018, the NYDFS launched a regulatory framework for virtual currency firms operating in New York, including restrictions on advertising to safeguard consumers.
As the crypto sector continues to grow, regulators are becoming increasingly vigilant about how cryptocurrencies and other digital assets are marketed and sold. While investors may be attracted to the potential high returns that crypto investments can offer, they must also be aware of the risks involved and take steps to protect themselves.
In conclusion, the FCA and ASA’s joint campaign against crypto scams is a positive development that aims to protect consumers from fraudulent promotions. However, regulators must also ensure that their efforts do not stifle innovation and growth in the crypto sector.