Additional Guidance Issued by FCA to Assist Crypto Firms with UK Promotion Regulations Compliance
Summary:
The UK's Financial Conduct Authority (FCA) has provided additional guidance for cryptocurrency companies following confusion over new promotion regulations introduced in October. The guidance aims to assist these companies in aligning with the rules and includes the FCA's response to industry feedback. Despite continued warnings from authorities since the new rules took effect, compliance remains low. The guidance adduces no additional obligations for crypto firms, but clarifies key sections of the rules. The UK also began enforcing the Financial Action Task Force’s Travel Rule in September and anticipates presenting stablecoin regulation to Parliament next year.
There appears to be a degree of confusion following the introduction of cryptocurrency promotion regulations on October 8 in the UK, as demonstrated by low adherence levels. The UK's Financial Conduct Authority (FCA) has reacted by providing further assistance to cryptocurrency companies to ensure their compliance. On November 2, the FCA issued thorough non-standard guidance to help these firms understand and comply with the rules. Their response also highlighted feedback from the cryptocurrency industry. FCA's head of consumer investments, Lucy Castledine, noted in a statement that this guidance was particularly tailored to assist cryptocurrency companies in their adherence to new rules that align with existing regulations for other high-risk investments.
Despite the authorities' ongoing release of advisories and reminders to the cryptocurrency sector since these rules took effect on June 8, compliance levels have remained low. Some deadlines have been extended until January 8, 2024. However, certain industry players have decided to exit the UK market due to these regulations.
It should be noted that the new 32-page guidance adds no fresh obligations for cryptocurrency businesses. Instead, it lays out a secondary international competitiveness goal while speaking to the FCA's expectations for domestic conduct by these firms. Besides clarifying key parts of the rules and other relevant legislation, the document answers questions posed during the consultation period.
The UK began enforcing the Financial Action Task Force’s Travel Rule on September 1. It is anticipated that regulation of stablecoins will be brought in front of Parliament next year for consideration.
Published At
11/2/2023 4:40:39 PM
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