The Financial Conduct Authority used a new report this week to outline the extent to which it has focused on illegal cryptocurrency promotions aimed at UK consumers over the past year.
To help consumers avoid falling victim to fraud, the regulator has issued a total of 2,285 warnings over the past year, with 450 in the fourth quarter of 2023 specifically targeting illegal cryptocurrency promotions targeting UK consumers.
Regulators have withdrawn or modified more than 10,000 financial ads and other promotions in 2023, according to data released Wednesday. This is a 17% increase compared to the previous year.
Examples of enforcement interventions by the FCA in 2023 include taking action against companies offering eligible crypto assets without identifying web pages that constitute financial promotions. The FCA also said it had provided feedback to cryptocurrency companies using affiliates to promote their products without a clear governance framework to ensure that promotions run by affiliates were legitimate.
The FCA’s Financial Promotions Regulations
The FCA’s Financial Promotion Rules for Cryptocurrencies came into effect on 8 October 2023. In the new guidance, the regulator warned that cryptocurrency memes found not to comply with the new rules could potentially lead to criminal offences.
The FCA said that to ensure compliance, firms must announce financial promotions that are clear, fair and not misleading. Companies wishing to promote financial products must display clear risk warnings and disclose their regulatory status.
Regulators have also expressed concern about the rise in influencers promoting financial products.
Lucy Castledine, director of consumer investments at the FCA, said: “People need clear, fair and accurate information on which to base their financial decisions. We will continue to intervene and take action when we identify businesses that do not meet our minimum standards.” said.
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