Crypto Firms May Pay A Huge Price For Breaching Advertising Laws In United Kingdom

Ever since the cryptocurrency industry gained momentum in late 2020, the United Kingdom regulators have become very active when it comes to cryptocurrencies.

They have been paying a lot of attention to the crypto and blockchain projects and their operators to ensure things stay under control.

Despite the efforts put in by the regulatory watchdogs, the people in the United Kingdom would get scammed by crypto scammers/fraudsters.

What Caused the Scams?

For a long time, the UK watchdogs tried to find the criminals behind the scams but they did not find much luck.

They kept looking but they couldn’t find the ones responsible for the scams. Turns out, they had been looking in the wrong direction.

The fraudsters were always in front of them but they had always missed them because they did not look in the right direction.

Later, it was the UK advertising watchdog who realized by the end of 2021 that if the advertisements were controlled, they could put a stop to crypto scams.

It was the advertisements that the crypto firms used to lure investors in the United Kingdom. They advertised false and incorrect information that sounded too good to be true when it came to investments.

Since then, the UK advertising watchdog has continued imposing stricter regulations on cryptocurrency firms. It has tried keeping a leash on the impersonating and false crypto projects.

The fact is that even some of the regulated and authentic cryptocurrency firms are also accustomed to advertising somewhat of incorrect or hyped figures and claims.

Therefore, the concerned regulator has come up with something far stricter and more aggressive against such firms.

New Advertising Rules

The reports claim that the United Kingdom is to introduce new advertisement rules that are going to be very strict on the crypto firms.

The new rules would see crypto firm executives face jail time if they do not act in accordance with the requirements and guidelines.

They have to ensure that while promoting and advertising, they adhere to certain requirements. If they fail to be compliant with these requirements, they will end up facing up to two years behind bars.

Statement by the FCA

The Financial Conduct Authority (FCA) of the United Kingdom is the entity behind the proposal of the new rules. It was back on February 6 when the FCA issued the statement where it revealed the new advertisement rules.

The regulator confirmed that the new rules have been proposed under the “Financial Promotions Regime”.

As per the regulator, if the UK Parliament approves the new rules, then every crypto firm operating in the United Kingdom will have to adhere to them.

Even the cryptocurrency firms operating from outside of the United Kingdom and offering services to the UK locals will have to adhere to these requirements.

The FCA is confident that the new rules will be reviewed and accepted by the Parliament. Therefore, they have intimated the crypto firms to prepare for the strict rules.

They have intimated to the firms that they must ready themselves to follow the stricter rules. If they do not, then things may not work out for them in the long run.

The FCA has stated that it is highly recommended that crypto firms start promoting their services the right way. If they start doing it right away, they will not suffer any kinds of consequences in the future.

They have advised the firms to take all the legal advice and perform the necessary actions while offering services to UK nationals. This way, they will find it easier to adapt to the new advertisement rules.

Crypto Firms Must Avoid Breaching FSMA

The regulator has provided four routes that the local and overseas crypto firms must adhere to when advertising cryptocurrencies.

If they do not adhere to the four routes, they will be punished accordingly for breaching the FSMA of 2000. According to the new rule, the executives of the crypto firm will be prisoned for up to two years.

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