FCA warns about common issues with crypto marketing

Following the coming into force of the new financial promotion rules for cryptoasset service providers (EventID 21585) and the publication of its expectations in this context (EventID 22920), the Financial Conduct Authority has published a first „warning“ towards cryptoasset service providers and firms approving their promotions in which the FCA addresses common issues it has observed in connection with such promotions, including the following:
– promotions make claims about the safety, security, or ease of using cryptocurrency services without adequately emphasizing the associated risks;
– inadequate visibility of risk warnings due to small font sizes, hard-to-read color choices, or non-prominent placement; and
– firms failing to furnish customers with sufficient information regarding the risks linked to the specific products being promoted.
The FCA emphasizes that it expects authorized firms responsible for approving cryptoasset financial promotions to take their regulatory responsibilities seriously. The FCA will not refrain from taking corrective action, if needed, as evidenced by the imposition of restrictions on an authorized firm to prevent it from endorsing cryptocurrency financial promotions.
Additionally, the FCA will continue to actively identify and take action against businesses that unlawfully promote cryptoassets to UK consumers. Since the regulatory changes came into effect on October 8, 2023, the FCA has issued a total of 221 warnings, placing the firms on the FCA’s corresponding warning list. This list will be continuously updated and any firm offering cryptoasset services without approved financial promotions will be placed on that list.