According to documents published Thursday, the UK Financial Conduct Authority (FCA) is aiming to put tough new rules in place for crypto advertising.
The FCA aims to set the rules once planned laws for the industry are finalised, with one of the rules said to be that crypto will be classed as “restricted mass market investments.” This means any advertisements or promotions will need to have “clear risk warnings.” The regulator added it will also mean a ban on investment incentives, such as “refer a friend” or “new joiner bonuses.”
Another requirement will be for new investors to receive a 24-hour cooling-off period from those marketing to them.
The new rules are set to be effective from October 8.
The FCA said in its policy statement:
Even when the financial promotions regime comes into force, cryptoassets will remain high risk and largely unregulated.
Consumers should only invest in cryptoassets if they understand the risks involved and are prepared to lose all their money. Consumers should not expect protection from the Financial Service Compensation Scheme (FSCS) or Financial Ombudsman Service if something goes wrong.”
The measures are being put in place to ensure that new investors who want to buy crypto understand the risks.
In order to make effective investment decisions, the regulator said it wants consumers to obtain timely, quality information. They also don’t want consumers to be misled, pressured, or inappropriately incentivised, resulting in them investing in products that do not meet their needs.
