The UK Financial Conduct Authority (FCA) is finalizing regulations
The new rules equire clear risk warnings
The UK Financial Conduct Authority (FCA) is finalizing regulations aimed at crypto marketing to address the "growing mismatch" between consumers' investment decisions and risk tolerance. The new rules, set to take effect on October 8 after a four-month transition period, require clear risk warnings, non-misleading advertisements, and a cooling-off period for first-time investors.
The cooling-off period, one of the significant requirements, prohibits sending consumers a Direct Offer Financial Promotion (DOFP) without them reconfirming their request at least 24 hours later. The FCA aims to provide consumers with time and appropriate risk warnings to make informed investment choices, particularly targeting novice users who may get "cold feet" when it comes to crypto investments.
The regulations come as the number of crypto holders in the UK has more than doubled in one year, reaching approximately 5 million adults holding crypto assets. The FCA survey revealed that 40% of respondents purchased crypto assets as a gamble, and around 30% expressed regret over their crypto investments. The FCA's focus on crypto marketing follows the U.S. Securities and Exchange Commission's recent actions against various crypto exchanges. While the FCA aims to protect investors, it also acknowledges the need to strike a balance to avoid stifling innovation in the digital coin and blockchain space.
