- The United Kingdom’s Financial Conduct Authority has unveiled new marketing rules for crypto firms.&
- First-time crypto investors will get a 24-hour cooling period to prevent impulse buys.&
- The FCA’s new rules will classify crypto as restricted mass market investments that require clear risk warnings.&
- The new rules will take effect on October 8 and will prevent crypto firms from promoting schemes like “refer a friend.”&
The United Kingdom’s Financial Conduct Authority has unveiled a series of rules aimed at restricting crypto firms in the country from engaging in certain marketing tactics in the interest of consumer protection. The regulator stated that it would treat crypto as high-risk investments as per the new rules that are set to take effect on October 8, 2023.&
New Crypto Investors To Be Restricted From Trading In The First 24 Hours
According to a report by Reuters, as per the Financial Conduct Authority’s new rules, crypto will be classified as restricted mass market investments. The new classification will require crypto advertisements and marketing campaigns to include clear risk warnings. The UK regulator will also ban marketing promotions such as “refer a friend”, a scheme where crypto users are rewarded for recruiting their friends to the platform to buy crypto.
The FCA’s new rules would also require first-time crypto investors to go through a 24-hour “cooling off” period upon registering trading accounts. The regulator is aiming to discourage impulse crypto purchases by amateur traders through this rule. The new crypto rules are similar to those that are currently imposed by the financial regulator on high-risk investments in traditional finance.&
It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Consumers should still be aware that crypto remains largely unregulated and high risk.”
Sheldon Mills, Executive Director of FCA’s Consumers and Competition Division
Su Carpenter, the operations director at CryptoUK, stated that her organization agreed with the FCA’s decision to enforce a cooling-off period but questioned the duration. CryptoUK is a self-regulatory trade association for the crypto industry in the United Kingdom. The trade body said that it looked forward to reviewing evidence-based findings on the rationale behind the proposed 24-hour cooling-off period.
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