On 25 October 2023, the FCA published a statement (Statement) warning about common issues with cryptoasset marketing in the UK.
The FCA has been supervising firms’ compliance with its new cryptoasset financial promotions regime since it came into force on 8 October 2023.
In the Statement, the FCA has identified the following common issues with cryptoasset financial promotions:
- promotions making claims about the “safety”, “security” or ease of using cryptoasset services without highlighting the risk involved;
- risk warnings not being visible enough due to small fonts, hard-to-read colouring or non-prominent positioning; and
- firms failing to provide customers with adequate information on the risks associated with specific products being promoted.
The Statement emphasises that the FCA will take action where authorised firms approving the financial promotions of cryptoasset businesses do not take their regulatory obligations seriously.
The Statement also highlights that the FCA is continuing to identify and act against businesses that are unlawfully promoting cryptoassets to UK consumers. Since 8 October 2023, the FCA has issued 221 alerts relating to the unlawful promotions. The FCA’s Warning List will be continually updated as it identifies businesses that may be unlawfully communicating cryptoasset promotions and that are failing to engage with the FCA constructively. The FCA is also working with businesses (such as social media platforms, app stores and search engines) to remove or block unlawful promotions.
The FCA advises firms that are involved in promoting cryptoassets to retail consumers or approving financial promotions for cryptoassets to expect it to review their promotions for compliance with the FCA’s rules.
Where firms are engaging with the FCA in good faith with a view to achieving compliance, the FCA states that it is taking a proportionate approach to implementation. However, in the case of non-compliance, the FCA reiterates that it will take robust action to remove unlawful content to protect consumers.
For our other recent articles on the FCA’s new cryptoasset financial promotions regime, please see: FCA Final Warning for Cryptoasset Firms Publishing Financial Promotions in the UK, FCA Publishes Letter on Preparations for Cryptoasset Financial Promotion Rules, FCA Publishes Letter to Cryptoasset Firms on Changes to Financial Promotion Rules and FCA Publishes Near-Final Cryptoasset Marketing Rules.