Reading 2 minutes Views 3 Published Updated
The United Kingdom Financial Conduct Authority, or FCA, has announced that by October 2023, all crypto asset firms selling to users in the country must comply with its financial promotion regime.
In letters dated July 4, the FCA said that starting October 8, companies operating in the UK will only have “four ways to legally report promotions of cryptoassets” to comply with the financial oversight regime. These legal options included the endorsement or communication of a promotion by an authorized party, the creation of a promotion by an FCA registered company, or the running of a promotion that qualifies as tax-exempt under the UK Financial Services and Markets Act.
According to the Financial Observer, the promotions included “websites, mobile apps, social media posts and online ads” that “have the potential to make an impact in the UK” and were not limited to firms based in the country. Jason Probin, FCA’s head of cryptocurrency financial promotion, suggested in a July 4 LinkedIn post that firms’ failure to comply could result in criminal charges.
“We will take strong action against those who illegally promote products to UK consumers,” the FCA said in a notice. “This may include, but is not limited to, putting firms on our list of warnings asking them to close websites, social media accounts, apps, and all other promotions that are infringing, as well as enforcement action.”
Related: UK Legal Commission Recommends ‘Excellent’ Legal Category for Cryptocurrency
The FCA first announced a deadline in October on June 8, inviting crypto companies to adopt a marketing approach that gives clients a “cooling off period” to consider the risks associated with investing in digital assets. Once the firms submit the necessary information for registration, the FCA said it could take up to three months to review the application.
In addition to complying with the regulator’s marketing regime, companies must register with the FCA in order to “carry on activities with crypto assets” in the UK. At press time, the FCA was listing 42 registered crypto firms under its requirements, including Bitstamp, Revolt, MoonPay, and Galaxy Digital UK.