UK's FCA Targets Crypto Firms For Non-compliance With Advertisement Rules
Summary:
The UK's Financial Conduct Authority (FCA) has detailed its actions against financial promotions, particularly crypto-related ads, highlighting significant non-compliance found in its review of regulated and unregulated crypto firms. The FCA reported 450 consumer alerts against unauthorized crypto promotions between October and December 2023, and removal of 35 apps from stores in the same period. The regulator warned of continued action against unlawful promotions in 2024 and raised concerns over regulated firms supporting illegal crypto promotions. Also, over 10,000 financial ads were withdrawn or amended in 2023, and more than 24,000 complaints were received about potential unauthorized businesses.
U.K.'s independent financial watchdog, the Financial Conduct Authority (FCA), has unveiled a report outlining its measures against financial advertising, with a particular focus on crypto-related promotions. On February 14, the FCA highlighted their observation of "substantial non-compliance" with crypto promotion regulations implemented on October 8, 2023. The authority claims to have examined both regulated and unregulated cryptocurrency firms, identifying common problems, which include the use of one-size-fits-all risk summaries devoid of product-specific risk adjustments for things like stablecoins or asset-based coins, and misuse of regulated status for promotional purposes. The FCA also indicated firms are making unfounded promises about the safety, convenience, and security of their crypto services while downplaying risks. The watchdog cautioned companies about persistent rule breaches, threatening possible enforcement actions. As per their records, between October 8 and December 31, crypto firms received 450 consumer alerts for unlawful crypto promotions. The FCA stated: “Our collaboration with tech companies is aimed at eliminating and blocking illegal promotional activities, encompassing websites, mobile apps, and social media accounts. For example, 35 apps were expunged from app stores by December's end, as a result of our joint efforts.” Crypto businesses were further warned that the regulator will persist in clamping down on illegal promotions in 2024. The FCA also voiced reservations over regulated entities failing to meet their duties while aiding crypto firms unlawfully pushing products to U.K. consumers. At the same time, the watchdog reported that in 2023, over 10,000 financial ads within the U.K. were either removed or corrected under their orders. The FCA disclosed that in that same year, they received in excess of 24,000 complaints regarding potential illegitimate firms. These reports were prioritized once reliable signs of a breach were detected. The authority continues to advise consumers to report doubtful promotions and likely scams via their formal channels.
Published At
2/15/2024 11:12:45 AM
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