The UK
financial watchdog has said crypto firms in the country will have four “legal
routes” through
which they can comply with its rules for digital assets promotion coming into
force on October 8, 2023. The Financial Conduct Authority (FCA ) stated this today
(Tuesday) in a letter sent out to crypto firms and
jointly signed by Victoria McLoughlin, Head of Digital Assets Supervision,
Policy and Competition in the Department of Market
Interventions, and Lucy
Castledine, Director of Consumer Investments Supervision, Policy and
Competition.
In the
letter, the executives explained that the options available include publishing
the promotion through an ‘authorized person’ or having
it approved by an authorized person. FCA defines an ‘authorized
person’ as an
entity or individual authorized
to carry out a regulated activity under the Financial Services and Markets Act
(FSMA) 2000.
The last
two options are to communicate the promotion through a crypto firm registered
under the UK money
laundering regulation or apply the exemption provided by the
Financial Promotion Order of the FSMA. Promotions covered by the rules include
website, mobile app and social media posts as well as online advertising.
In early
July, FCA disclosed that it was finalizing
regulations around cryptocurrency marketing and advertising in the country. The
rules were proposed as the number of crypto holders in the UK more than doubled
in the past year.
The
financial watchdog noted that the new rules will require ‘clear risk
warnings’ on any crypto advertisements or promotions. It will also ban
investment incentives that came in the form of ‘refer to a friend’ or ‘new
joiner bonuses’ schemes.
FCA Calls
for Preparation
Meanwhile, McLoughlin
and Castledine in the letter released on Monday noted that crypto asset firms,
including those based overseas but marketing to UK customers, can get ready for
the new regime by considering which of the four legal routes they can adopt and
how they will meet the requirements of that route.
They also
urged the firms to consider how they will deal with UK customers if they are
unable to communicate their crypto-related promotions with them.
“We expect
firms to clearly communicate any changes to services they will provide to UK
consumers and give consumers adequate time to respond to any changes before
they go into effect,” the FCA executives added.
Furthermore,
the FCA leaders noted that they expect companies that decide to
no longer offer their services to UK consumers to “have in place orderly
wind-down plans to minimize any impact on UK consumers.”
Moreover, they pointed out that putting out crypto promotions without following any
of the four stated routes will be considered a criminal offence punishable by
up to 2 years imprisonment, an unlimited fine, or both. Other measures will
include ordering the shutting down of websites, social media accounts and apps,
among others.
Meanwhile, UK monarch, King Charles III last week approved as law a new bill that classifies the trading of cryptocurrencies as a regulated activity and brings stablecoins under the scope of payment rules. The bill also includes measures to control the promotion of digital assets.
XS.com appoints MENA Director; FMA issues new warnings; read today’s news nuggets.
The UK
financial watchdog has said crypto firms in the country will have four “legal
routes” through
which they can comply with its rules for digital assets promotion coming into
force on October 8, 2023. The Financial Conduct Authority (FCA ) stated this today
(Tuesday) in a letter sent out to crypto firms and
jointly signed by Victoria McLoughlin, Head of Digital Assets Supervision,
Policy and Competition in the Department of Market
Interventions, and Lucy
Castledine, Director of Consumer Investments Supervision, Policy and
Competition.
In the
letter, the executives explained that the options available include publishing
the promotion through an ‘authorized person’ or having
it approved by an authorized person. FCA defines an ‘authorized
person’ as an
entity or individual authorized
to carry out a regulated activity under the Financial Services and Markets Act
(FSMA) 2000.
The last
two options are to communicate the promotion through a crypto firm registered
under the UK money
laundering regulation or apply the exemption provided by the
Financial Promotion Order of the FSMA. Promotions covered by the rules include
website, mobile app and social media posts as well as online advertising.
In early
July, FCA disclosed that it was finalizing
regulations around cryptocurrency marketing and advertising in the country. The
rules were proposed as the number of crypto holders in the UK more than doubled
in the past year.
The
financial watchdog noted that the new rules will require ‘clear risk
warnings’ on any crypto advertisements or promotions. It will also ban
investment incentives that came in the form of ‘refer to a friend’ or ‘new
joiner bonuses’ schemes.
FCA Calls
for Preparation
Meanwhile, McLoughlin
and Castledine in the letter released on Monday noted that crypto asset firms,
including those based overseas but marketing to UK customers, can get ready for
the new regime by considering which of the four legal routes they can adopt and
how they will meet the requirements of that route.
They also
urged the firms to consider how they will deal with UK customers if they are
unable to communicate their crypto-related promotions with them.
“We expect
firms to clearly communicate any changes to services they will provide to UK
consumers and give consumers adequate time to respond to any changes before
they go into effect,” the FCA executives added.
Furthermore,
the FCA leaders noted that they expect companies that decide to
no longer offer their services to UK consumers to “have in place orderly
wind-down plans to minimize any impact on UK consumers.”
Moreover, they pointed out that putting out crypto promotions without following any
of the four stated routes will be considered a criminal offence punishable by
up to 2 years imprisonment, an unlimited fine, or both. Other measures will
include ordering the shutting down of websites, social media accounts and apps,
among others.
Meanwhile, UK monarch, King Charles III last week approved as law a new bill that classifies the trading of cryptocurrencies as a regulated activity and brings stablecoins under the scope of payment rules. The bill also includes measures to control the promotion of digital assets.
XS.com appoints MENA Director; FMA issues new warnings; read today’s news nuggets.
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- Source: https://www.financemagnates.com//cryptocurrency/fca-provides-4-legal-routes-for-compliance-with-upcoming-crypto-promotion-rules/
