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The UK’s Financial Conduct Authority (FCA) updated the crypto industry regulations recently, which are set to take effect in October, however experts have warned that most firms will struggle to comply with them.
The UK government’s new financial promotion regulations are set to impact cryptocurrency assets, coming into effect in October. These new regulations will impose strict laws on the crypto industry on how to promote their digital services in the United Kingdom. These latest regulations are designed to prevent fraud and protect investors effectively. Some experts predict that many companies will be unable to comply with the new rules, leading to confusion and uncertainty in the industry.
The general counsel of Dephi Labs, Gabriel Shapiro, warned most crypto firms that they will find the new regulations challenging. This could lead to slow down processes in the crypto industry while decreasing investor confidence, and increasing the cost of doing business in the UK. Shapiro noted that these strict compliance measures will only be followed by a few DeFi projects. There are various challenges that crypto firms might encounter during the compliance process. Notably, the cost of compliance will be increased, and platforms will reallocate funds from other areas to cover that cost. The crypto attorney stated that while the latest obligations will secure “investing in coin,” he also mentioned that these laws are not reliable for the crypto industry, “most of the tech is peer to peer and many participants in the industry are not intermediaries or custodians.”
The government agencies also created several acceptable channels for companies to promote crypto assets to customers in the United Kingdom. These new regulations will impact various well-established names, including Luna and Paypal, to change their approach toward Anti-Money Laundering (AML) regulations.