The Financial Conduct Authority (FCA) of the United Kingdom has formally communicated the potential extension of up to three months for cryptocurrency companies to implement crucial modifications to their marketing practices.
Originally planned to become effective on October 8, 2023, the new regulations have been designed to curtail aggressive marketing strategies and unsuitable incentives.
However, companies in compliance can now adjust their technical infrastructure to meet these requirements until January 8, 2024.
According to the forthcoming guidelines, cryptocurrency services will be categorized as high-risk investments in marketing materials.
Consequently, all platforms operating globally are obligated to provide transparent risk warnings to their UK-based clientele and secure authorization from an accredited institution for any public promotional activities.
Companies must formally request flexibility to be eligible for this extension, granting them sufficient time to implement necessary operational modifications.
One potential alteration could involve introducing a 24-hour cooling-off period for new customers.
Non-compliance with these regulations carries severe consequences, including potential criminal charges with penalties such as unlimited fines and imprisonment.
These rules, resembling those introduced for other high-risk investments in the past year, are intended to enhance consumer protection.
Cryptoasset enterprises must ensure their marketing is “clear, fair, and not misleading,” prominently featuring risk warnings and refraining from inappropriate investment incentives.
These regulations apply universally to companies, reinforcing consumer safeguards against the inherent risks associated with cryptoassets.
Despite the government’s ambition to establish the UK as a cryptocurrency hub, industry representatives have expressed apprehension that these measures, intended to protect consumers, may deter business activities in the country.
