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<p><strong>The UK watchdog is introducing new regulations for crypto ads and referral programs.</strong></p>
<h2 style="text-align: center;" id="stricter-rules-for-crypto-advertisers">Stricter Rules for Crypto Advertisers</h2>
<p>The Financial Conduct Authority (FCA) in the UK has <a href="https://www.fca.org.uk/publication/policy/ps23-6.pdf" target="_blank" rel="noopener">announced</a> new regulations for cryptocurrency advertisers, set to take effect from October 8. These regulations include a mandatory &#8220;cooling-off period&#8221; for first-time investors and a ban on referral bonuses.<br />
The FCA has revealed that advertisers of crypto services will face more rigorous rules in the UK starting from October 8. The regulatory body stated that crypto companies must implement a cooling-off period for first-time investors. Additionally, firms in the sector will be required to eliminate referral bonuses. These measures aim to ensure that crypto investors have a better understanding of the risks associated with their investments.</p>
<h2 style="text-align: center;" id="the-importance-of-informed-decision-making">The Importance of Informed Decision-Making</h2>
<p>Sheldon Mills, the executive director of consumers and competition at the FCA, emphasized that while it is ultimately up to individuals to decide whether or not to invest in cryptocurrencies, research has shown that many regret impulsive decisions. The new rules aim to provide people with sufficient time and appropriate risk warnings to make informed choices. Mills also stated that the crypto industry needs to prepare for these significant changes, and the FCA is working on additional guidance to assist them in meeting regulatory expectations.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">&#8220;Consumers should still be aware that crypto remains largely unregulated and high risk,&#8221;<br />
&#8211; Sheldon Mills, executive director at the Financial Conduct Authority consumers and competition division<a href="https://t.co/Vm5198b6ky">https://t.co/Vm5198b6ky</a></p>
<p>— relevantusername⬆️🗹 (@relevant_2020) <a href="https://twitter.com/relevant_2020/status/1666639510191460352?ref_src=twsrc%5Etfw">June 8, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="alignment-with-high-risk-investment-advertising-restrictions">Alignment with High-Risk Investment Advertising Restrictions</h2>
<p>The FCA&#8217;s recent announcement regarding crypto ads aligns with the measures introduced last year to address misleading advertisements related to high-risk investment products. While these initial restrictions did not cover cryptocurrencies, the FCA was awaiting government confirmation to bring crypto products under its regulatory authority. The regulator now confirms that the steps taken for crypto ads are consistent with the measures introduced for advertising high-risk investments.</p>
<h2 style="text-align: center;" id="consultation-on-additional-guidance">Consultation on Additional Guidance</h2>
<p>The FCA is also seeking input from industry stakeholders on additional guidance to establish requirements for crypto advertisers. Interested parties have until August 10 to contribute their feedback.</p>
<h2 style="text-align: center;" id="uk-regulator-8217-s-efforts-to-protect-consumers">UK Regulator&#8217;s Efforts to Protect Consumers</h2>
<p>The Financial Conduct Authority is <a href="https://walletinvestor.com/magazine/uk-government-to-ban-cold-calls-selling-financial-products-including-crypto" target="_blank" rel="noopener">intensifying its efforts</a> to safeguard consumers from potential losses in crypto investments and the associated companies. On June 8, the regulatory body introduced new marketing rules specifically tailored for crypto-related firms. These rules mirror the regulations imposed on known high-risk investments in traditional finance.</p>
<h2 style="text-align: center;" id="key-aspects-of-the-new-regulations">Key Aspects of the New Regulations</h2>
<p>The UK regulator expects crypto firms to incorporate clear risk warnings in their marketing campaigns and advertisements. The &#8220;refer a friend&#8221; scheme, which rewards users for recruiting others to buy digital currencies, will be banned. Additionally, the FCA proposes a mandatory 24-hour &#8220;cool-off&#8221; period for first-time crypto investors. This means that new customers must wait at least a full day after registering a valid trading account before making any purchases.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">UK Financial Conduct Authority Introduces New Marketing Rules for Crypto <a href="https://t.co/Sxx5Y8L6Xk">https://t.co/Sxx5Y8L6Xk</a> <a href="https://t.co/U764z8GzEX">pic.twitter.com/U764z8GzEX</a></p>
<p>— Crowdfunding News (@Crowdfundnews) <a href="https://twitter.com/Crowdfundnews/status/1666582446157234176?ref_src=twsrc%5Etfw">June 7, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="consumer-protection-and-resistance">Consumer Protection and Resistance</h2>
<p>Sheldon Mills, the executive director of the FCA&#8217;s Consumers and Competition Division, explained that while the decision to invest in crypto ultimately lies with individuals, research indicates that many regret rushing into such investments. Mills reminds consumers that crypto remains largely unregulated and carries high risks.</p>
<p>CryptoUK, a trade association representing the crypto industry in the UK, which practices self-regulation, has expressed some resistance to the 24-hour &#8220;cool-off&#8221; period. The association is requesting solid evidence supporting the necessity of this waiting period and hopes that regulations will enable consumers to transact and invest in crypto assets with confidence, considering their diverse use cases beyond mere investments.</p>
<h2 style="text-align: center;" id="summary">Summary</h2>
<p>The UK&#8217;s Financial Conduct Authority has announced stricter regulations for cryptocurrency advertisers. The FCA aims to enhance investor awareness of crypto risks. The regulations align with measures for high-risk investment advertising. The FCA is consulting on additional guidance and seeking industry input. These efforts reflect the FCA&#8217;s commitment to protecting consumers and addressing crypto-related risks. Overall, the these marketing rules ensure clear risk warnings, prohibit referral bonuses, and enforce consumer protection in the crypto market.</p>

FCA Imposes Stricter Rules for Crypto Ads, Bans Referral Bonuses

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