FCA Extends Crypto Marketing Deadline Until 2024

Key Points:

• The UK’s FCA is considering giving crypto firms a 3-month extension for new marketing rules.
• Regulations include clear risk warnings and approval for promotions, with technical changes if needed.
• Concerns arise over the potential impact on the UK’s crypto industry’s growth, despite government ambitions.

The UK’s Financial Conduct Authority (FCA) has announced a possible extension of up to three months for cryptocurrency firms to implement critical marketing changes.

Originally scheduled to take effect on October 8, 2023, the new regulations aim to clamp down on aggressive marketing tactics and inappropriate incentives. However, compliant firms may now have until January 8, 2024, to adjust their technical setups to meet these requirements.

Under the upcoming rules, cryptocurrency services will fall under the high-risk investments category for marketing material. This means that all platforms worldwide must display clear risk warnings to their UK customers and obtain approval from an authorized firm for public promotions.

To be eligible for the extension, firms must apply for flexibility, which will allow them ample time to implement necessary back-office changes. One key feature that may be introduced is a 24-hour cooling-off period for new customers.

Failure to comply with these regulations may result in criminal charges carrying penalties that include unlimited fines and imprisonment.

These rules, similar to those implemented for other high-risk investments last year, aim to provide greater protection to consumers.

Cryptoasset firms must ensure that their marketing is “clear, fair, and not misleading,” prominently display risk warnings, and refrain from inappropriate incentives for investment. These regulations apply to firms worldwide, reinforcing consumer protection against the inherent risks of cryptoassets.

While the FCA‘s actions are intended to safeguard consumers, industry representatives have expressed concerns that these measures could discourage business activity in the UK, despite the government’s aspirations to establish the country as a cryptocurrency hub.

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