The
Financial Conduct Authority (FCA) has updated its guidance for cryptoasset
firms, following recent legislative changes that bring crypto promotions
targeting UK consumers under its oversight. The new rules aim to enhance
consumer understanding of crypto investments and the associated risks. Particularly
given that when the regulations came into force, more than 200 crypto firms did
not comply with the fundamental requirements.
Cryptoasset
firms in the UK are now navigating a new regulatory landscape. The FCA’s latest
guidance, born out of extensive industry consultation, is tailored to help
these firms adhere to the updated marketing rules. The guidance clarifies how
authorized firms should integrate “Consumer Duty” act into their promotional
activities.
Lucy
Castledine, the FCA’s Director of Consumer Investments, emphasized the
alignment of the new crypto marketing rules with those for other high-risk
investments. The FCA has proactively sought industry feedback to refine these
rules and the accompanying guidance, acknowledging the valuable insights gained
during the consultation phase.
“We
continuously seek industry’s input to get rules, their implementation, and the
support we offer right. This guidance is no exception and we’re grateful for
all the input we received,” Castledine added.
Crypto Evolves Quickly
The FCA
acknowledges the rapid evolution of the crypto sector and the global regulatory
environment, committing to ongoing engagement with industry players and
periodic guidance reviews. The FCA had previously released examples to
distinguish between good and poor marketing practices in preparation for the
new financial promotion rules, which have been in effect for almost a month.
Despite introducing
these rules, the FCA maintains its stance on the high-risk nature of crypto assets,
cautioning investors to be ready for the possibility of total investment loss.
The FCA reminds that its “Warning List” serves as a resource for consumers to
identify unauthorized firms and make more informed decisions regarding crypto
investments.
Speaking at @DeloitteUK Consumer Duty – Next Steps event, Nisha Arora revealed that since the #ConsumerDuty came into force some good firm practices are already benefitting #consumers of #FinancialServices. https://t.co/MCz60ACwLx
— Financial Conduct Authority (@TheFCA) November 1, 2023
Additional FCA’s Support
and Future Plans
The FCA has
provided a modification by consent, offering registered or authorized
cryptoasset firms a transitional period to implement certain technical aspects
of the new rules. Firms have until 8 January 2024 to incorporate features such
as the 24-hour cooling period, client appropriateness testing, and client
categorization. All other aspects of the financial promotions regime have been
effective since 8 October 2023.
Firms
promoting cryptoassets in the UK must now be authorized or registered by the
FCA or have their marketing approved by an authorized firm. This alignment with
the rules for other high-risk investments follows extensive collaboration with
the government, international counterparts, and the industry.
The FCA has
been actively preparing firms for these changes since February and is adopting
a proportionate approach to enforcement for firms that engage in good faith
towards compliance . In the initial fortnight of the marketing rules’
implementation, the FCA issued 221 alerts, highlighting prevalent issues in
crypto marketing.
Looking
ahead, the FCA plans to release a Discussion Paper on the regulation of
stablecoins for payments in the UK, inviting stakeholders to participate in the
discourse. This move underscores the FCA’s commitment to shaping a regulatory
framework that keeps pace with the dynamic crypto market.
The
Financial Conduct Authority (FCA) has updated its guidance for cryptoasset
firms, following recent legislative changes that bring crypto promotions
targeting UK consumers under its oversight. The new rules aim to enhance
consumer understanding of crypto investments and the associated risks. Particularly
given that when the regulations came into force, more than 200 crypto firms did
not comply with the fundamental requirements.
Cryptoasset
firms in the UK are now navigating a new regulatory landscape. The FCA’s latest
guidance, born out of extensive industry consultation, is tailored to help
these firms adhere to the updated marketing rules. The guidance clarifies how
authorized firms should integrate “Consumer Duty” act into their promotional
activities.
Lucy
Castledine, the FCA’s Director of Consumer Investments, emphasized the
alignment of the new crypto marketing rules with those for other high-risk
investments. The FCA has proactively sought industry feedback to refine these
rules and the accompanying guidance, acknowledging the valuable insights gained
during the consultation phase.
“We
continuously seek industry’s input to get rules, their implementation, and the
support we offer right. This guidance is no exception and we’re grateful for
all the input we received,” Castledine added.
Crypto Evolves Quickly
The FCA
acknowledges the rapid evolution of the crypto sector and the global regulatory
environment, committing to ongoing engagement with industry players and
periodic guidance reviews. The FCA had previously released examples to
distinguish between good and poor marketing practices in preparation for the
new financial promotion rules, which have been in effect for almost a month.
Despite introducing
these rules, the FCA maintains its stance on the high-risk nature of crypto assets,
cautioning investors to be ready for the possibility of total investment loss.
The FCA reminds that its “Warning List” serves as a resource for consumers to
identify unauthorized firms and make more informed decisions regarding crypto
investments.
Speaking at @DeloitteUK Consumer Duty – Next Steps event, Nisha Arora revealed that since the #ConsumerDuty came into force some good firm practices are already benefitting #consumers of #FinancialServices. https://t.co/MCz60ACwLx
— Financial Conduct Authority (@TheFCA) November 1, 2023
Additional FCA’s Support
and Future Plans
The FCA has
provided a modification by consent, offering registered or authorized
cryptoasset firms a transitional period to implement certain technical aspects
of the new rules. Firms have until 8 January 2024 to incorporate features such
as the 24-hour cooling period, client appropriateness testing, and client
categorization. All other aspects of the financial promotions regime have been
effective since 8 October 2023.
Firms
promoting cryptoassets in the UK must now be authorized or registered by the
FCA or have their marketing approved by an authorized firm. This alignment with
the rules for other high-risk investments follows extensive collaboration with
the government, international counterparts, and the industry.
The FCA has
been actively preparing firms for these changes since February and is adopting
a proportionate approach to enforcement for firms that engage in good faith
towards compliance . In the initial fortnight of the marketing rules’
implementation, the FCA issued 221 alerts, highlighting prevalent issues in
crypto marketing.
Looking
ahead, the FCA plans to release a Discussion Paper on the regulation of
stablecoins for payments in the UK, inviting stakeholders to participate in the
discourse. This move underscores the FCA’s commitment to shaping a regulatory
framework that keeps pace with the dynamic crypto market.
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- Source: https://www.financemagnates.com//cryptocurrency/fca-unveils-fresh-guidance-amidst-crypto-marketing-turmoil-in-the-uk/
