The Financial Conduct Authority (FCA) in the United Kingdom is preparing to take action against businesses that violate the upcoming rules regarding cryptocurrency advertisements.
Starting from October 8th the FCA intends to establish standards for companies involved in cryptocurrency services.
According to a report by Bloomberg these regulations will require service providers to clearly disclose any potential risks in their advertisements within the UK. These disclosures must be present across all communication channels, including websites, mobile apps and social media. Furthermore only businesses approved by the FCA will be permitted to use these disclosures.
In order to regulate advertising more effectively the UK has classified crypto assets as “restricted mass market investments ” allowing them to be promoted widely but with specific conditions.
These forthcoming regulations are applicable to all businesses advertising currencies in the UK regardless of their origin. They were initially proposed in June as a means of enhancing oversight over crypto services.
Lucy Castledine, Director of Consumer Investments at the FCA emphasized that this would lead to increased monitoring and regulation of services. Non compliance will be closely monitored on a basis.
Additionally Castledine mentioned that the FCA plans to conduct inspections of over 100,000 websites, for compliance. They will collaborate with both global law enforcement agencies in order to address any violations.
The agency also intends to collaborate with technology companies to remove websites and apps that do not meet the required standards.
One crucial aspect of these regulations is the focus on providing ” risk warnings.” The aim is to ensure that users have an understanding of both the theoretical and practical aspects of cryptocurrencies enabling them to make well informed decisions.
Several crypto platforms, including ByBit, Luno and PayPal have decided to halt their operations in the UK in response to these regulations.
However as centralized crypto exchanges continue to serve as the entry point for newcomers companies like Bitget, Komainu and OKX are keen on filling the gap left by entities such as ByBit.
In order to comply with these rules Binance launched a platform for its British users on October 6. This platform will exclusively offer services that align with FCA regulations while phasing out features, like gift cards and referral rewards.