Decrypt’s Art, Fashion, and Entertainment Hub.
The Financial Conduct Authority (FCA) for the United Kingdom has announced that companies promoting cryptocurrencies to UK customers must abide by their existing financial promotion regime by October 8, 2023.
According to today’s bulletin, financial promotion is broad and technologically neutral, but it applies to websites, social media posts, mobile apps, and online advertising.
Today’s announcement read that companies will need to apply for registration and pay a fee if they are approved.
The financial regulator is also requesting companies clarify what steps they are taking with regard to the notice. Firms have until August 4 to report back to the request though the regime doesn’t go into effect until later this year.
The FCA has said it won’t just target entities operating in the UK, either, but also abroad, stating that if a company’s marketing scheme has an effect on British customers in any way, it will fall under their purview.
There will be four legal routes for communicating financial promotions, which include Anti-Money Laundering and counter-terrorism financing (AML/KYC), and other important information regarding the transfer of funds through cryptocurrency.
Failure to comply, says the FCA, can result in criminal charges.
Early last month, authorities in the UK began a consulting process to provide the necessary guidelines for companies operating “crypto asset” financial promotions.
Looking to gather information from any of the industry’s market participants, the aim is to assess the requirements for a company to offer promotions. That process will end by August 10 this year.
Sarah Pritchard, the FCA’s Executive Director of Supervision, Policy, and Competition, Markets said earlier this year that the FCA “will be on the lookout for firms that are not abiding by those rules. And if necessary, we will seek to take enforcement action."