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- 1 FCA announced that new crypto marketing rules would come into force in October.
- 2 The “Refer a friend” bonus will be banned.
- 3 There will be a clear risk warning for crypto – invest only if you are prepared to lose all your investment.
UK to Come Up With Stricter Rules For Ad Industry
Stricter marketing regulations are revealed by the banking regulator on Thursday. According to new rules, British consumers purchasing crypto assets will get a 24-hour “cooling-off” period for the first time starting in October.
Globally, there is almost no regulation of crypto assets like Bitcoin. But with the collapse of FTX last year, regulators are serious about formulating regulations for the industry. The FTX collapse left millions of investors with losses totalling Billions of dollars, including those in Britain.
According to the Financial Conduct Authority (FCA), “refer a friend” benefits for cryptocurrency buyers would also be eliminated. And anyone advertising such assets would have to give explicit risk warnings. They also need to guarantee that advertisements were transparent, accurate, and not deceptive.
The new crypto regulations came as Britain prepares to regulate crypto assets under a new financial services law this year. The FCA established similar regulations last year to address advertising for high-risk investments in conventional banking.
The choice to purchase cryptocurrency is up to the individual. However, studies suggest that many regrets making a hurried choice, according to Sheldon Mills, executive head of the FCA’s section of consumers and competition.
Sunak spoke positively of Crypto as finance minister. According to the Prime Minister, Crypto allows people to transact and invest. But at the same time, it is very important that consumers are well informed and must not be sold products with misleading claims.
“Consumers should still be aware that cryptocurrency remains largely unregulated and high risk,” he advised. According to an FCA study, the expected number of persons who own crypto assets has more than doubled between 2021 and 2022. 10% of the 2,000 respondents say they do.
According to the new regulations, cryptocurrency businesses will need to display disclaimers like, “Don’t invest unless you’re willing to lose all of your money. Because of the high level of risk involved, you shouldn’t anticipate being protected if something goes wrong.
Crypto advertisements are inviting stringent action by Britain’s Advertising Standard Authority. They have banned many misleading advertisements. Some companies whose ads were banned are Coinbase and Papa John’s.
The new regulations were welcomed by Myron Jobson, the senior personal finance analyst at the investment platform Interactive Investor. He noted that cryptocurrency advertising has turned into a “wild west of dubious claims and misleading information.”
To create a strong foundation for customer awareness, the regulator must face a challenge, “so that all the players know what good looks like”, according to him.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
