UK Crypto Firms Granted 3-Month Extension for Ad Rule Compliance
The Financial Conduct Authority (FCA) in the UK has recently introduced a set of fresh regulations designed to rein in aggressive marketing practices within the cryptocurrency sector. Initially scheduled for enforcement starting in October, companies are now afforded the option to apply for an extension until January to implement the necessary technical adjustments. It is important to emphasize that the FCA remains resolute in its commitment to taking punitive actions against non-compliant firms, particularly those operating from overseas or outside regulated frameworks.
These newly instated regulations, originally set to go live on October 8, encompass bans on incentives that are deemed inappropriate. However, companies that are in compliance now have the flexibility to defer their implementation until January 2024, granting them the essential time to establish the required technical infrastructure.
The FCA underscores the necessity for companies to formally request this extension, providing them with the indispensable duration to effectively carry out the mandated back-office modifications. The regulatory body reiterates its unwavering determination to pursue enforcement measures against overseas or unregulated firms that unlawfully target UK consumers, starting from October 8.
Furthermore, the FCA's directives dictate that cryptocurrency advertisements, which may include influencer endorsements or memes, must be transparent and equitable. Additionally, companies are prohibited from offering incentives like referral bonuses and free airdrops, aligning with the FCA's categorization of these as high-risk financial products.
Despite the government's ambition to position the UK as a central hub for cryptocurrency activities, industry representatives have expressed concerns that these stringent measures could potentially deter business operations within the country.