Crypto Under Fire in UK due to Government Changes
The UK government has announced sweeping changes to the marketing of digital assets, requiring crypto companies to offer customers a 24-hour "cooling-off period" before they can complete their transactions.
These changes aim to provide greater protection for new investors in the rapidly growing cryptocurrency market.
In addition to the cooling-off period, the new rules will ban "refer a friend" advertisements and require all marketing materials to be clear, fair, and non-misleading. Failure to comply with the regulations could result in company bosses facing imprisonment, fines, or both.
The rules, set to take effect from 8 October, will apply to transferable and fungible crypto assets, including popular digital currencies like Bitcoin. However, purchases of non-fungible tokens (NFTs) will not be covered by these advertising rules, except for a ban on offering them as incentives for investing in crypto.
The move comes in response to increasing concerns about the lack of regulation and the potential risks associated with cryptocurrencies. The government estimates that approximately one in ten UK adults now owns some form of crypto.
The Financial Conduct Authority (FCA) will be responsible for enforcing these changes, following recent legislation that granted the authority more control over the promotion of digital assets. The FCA has pledged to take robust action against companies that violate the rules, including taking their websites offline. These measures aim to ensure greater consumer protection and promote responsible marketing practices within the crypto industry.