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The UK’s latest obligations on the promotions of the crypto service providers came into force this week. These laws will align digital assets advertising with those that are implemented in traditional financial institutes.
These new regulations were implemented after reshaping the UK’s Financial Services and Markets Act (FSMA), enforced on Oct 8th 2023. After the implementation of this law, it is an offnse to promote unregistered crypto platform services. They can not advertise any digital assets product to anyone, albeit those promotions are created overseas, but they are banned until they get licensed from the UK’s financial regulatory authorities.
Furthermore, the promotional campaigns of crypto assets services should comply with the Financial Conduct Authority (FCA) measure before issuing them. These guidelines included that digital asset promotions should not mislead the audience, attach a high-risk warning, not claim a fake return on investment, and supervise first-time investors for 24 hours before trading or purchasing.
Primarily, the FCA claims there are only four rules to promote digital assets in the UK, or any advertising platform that does not comply with these measures will face hefty fines.
- The promotional campaign should be run through a licensed entity.
- The campaign is designed by a non-registered identity but issued by the registered platform.
- The promotion, according to the money laundering rules, for example, the promotion is made for a business that is registered with the FCA AML regime.
- The promotion complies with the other obligations set out by the Financial Services and Markets Act.
Not complying with these regulations is a criminal offence and poses fines, imprisonment, or both.
Digital asset businesses have had sufficient time to comply with the rules since they became public months ago, or they can contact the FCA for time extensions. However, the FCA claims that many businesses continue to violate the law. However, after 24 hours of implementing this law, FCA issued 146 warnings to various digital assets platforms that are non-complying with new digital assets promotions laws. These businesses have been included in the FCA’s public “Warning List,” highlighting firms doing illegal marketing and giving investors further details.