To protect consumers and combat unlawful advertising practices in the crypto market, the UK’s Financial Conduct Authority (FCA) has introduced stringent regulations for cryptocurrency advertising. These measures are part of the FCA’s ongoing commitment to safeguard individuals from scams and excessively risky investments. Additionally, the FCA has partnered with influencers to launch a joint campaign aimed at promoting safe financial products and educating the public about the potential risks associated with cryptocurrencies.
The collaborative campaign between the FCA and the Advertising Standards Authority (ASA) highlights the importance of influencers adhering to regulatory guidelines when endorsing financial products, particularly in the crypto sector. The FCA’s executive director of markets, Sarah Pritchard, emphasized the need for influencers to comply with the law, 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 joint campaign provides influencers with a checklist to ensure their promotions align with the regulatory requirements. By following these guidelines, influencers can play a vital role in promoting safe investments and raising awareness about the potential risks associated with crypto assets.
Moreover, the FCA had previously issued a notice in February 2023, highlighting the necessity for crypto promotions in the United States to be accompanied by an FCA-authorized person. This requirement underscores the FCA’s commitment to enforcing responsible advertising practices in the global crypto industry.
A campaign to stop influencers from promoting risky financial products was also previously launched in partnership by the FCA and the ASA.
Influencers, since then, use a checklist provided by the two agencies to make sure they adhere to the guidelines when pushing investments. In response to comments made about the campaign, Sarah Pritchard, executive director of markets at the FCA, said, “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 taken tough measures against illegal advertising in the cryptocurrency business. The FCA issued a letter in February noting that cryptocurrency advertisements needed to be accompanied by an FCA-authorised person, among other requirements.
These actions by the FCA, along with the new rules set to be implemented for crypto advertising, have significant implications for the UK’s crypto sector. The regulations classify cryptocurrencies as “restricted mass market investments,” establishing the need for clear risk warnings in all related advertisements and prohibiting the use of incentives to entice investors. These measures, combined with the collaborative campaign with influencers, aim to enhance consumer protection, foster responsible investment practices, and contribute to the overall development and credibility of the crypto sector.
The FCA’s efforts to regulate crypto advertising are not limited to the UK alone. In the US, the New York Department of Financial Services (NYDFS) has also taken steps to regulate crypto ads, including restrictions on advertising to safeguard consumers.
The global push for enhanced regulation in the cryptocurrency sector reflects the growing recognition of the importance of investor protection and the prevention of financial fraud. By implementing these strict advertising rules and collaborating with influencers, the FCA is taking proactive measures to ensure that individuals are well-informed about the risks and benefits associated with cryptocurrencies. These initiatives contribute to the establishment of a safer and more transparent environment for investors, bolstering the long-term sustainability and growth of the metaverse and the broader crypto industry.