The UK’s Financial Conduct Authority (FCA) has conducted a review of how crypto companies in the UK are adapting to the new crypto marketing rules, revealing positives and negatives.
The FCA launched the new measures in September 2023 to help protect consumers from potentially risky and misleading promotions from companies.
Nearly 10 months on, and the financial watchdog analysed how crypto firms operating were implementing recommended safeguarding measures, such as risk warnings and 24-hour cooling off periods.
The review focused on several crypto companies’ compliance whilst admitting that new enforced rules may take some time to adjust to.
Some firms have acted in good practice to mitigate any potential consumer-harming products or services from being available to customers.
The FCA revealed that companies have abided by some of the recommendations the regulator has recommended, such as personalised risk warnings, client categorisation, record keeping and due diligence.
On what the UK agency expects from one of its recommendations, the cooling off period, the FCA outlined that this measure enables “consumers time to reflect on the investment and decide whether to proceed to purchase the assets”.
However, the FCA also found “multiple instances” of firms not meeting or abiding by the promotion rules and has warned that they will act, with any potentially non-compliant actions hindering a firm’s chance of gaining a licence to operate in the country.
Some of the non-compliant standards so far observed relate to industry comparisons of what some firms deem as best practice and using it as a benchmark for what is acceptable.
Because the FCA has found widespread poor levels of market practice across the UK, the regulator has called on firms to seek advice from them and help drive up standards across the sector.
An FCA statement read: “All firms communicating or approving financial promotions must make sure they have strong systems and controls for compliance in place. We will continue to work with industry on this and other parts of the current and upcoming crypto regime.
