The UK’s Financial Conduct Authority (FCA) has been cracking down on crypto firms that are not following the rules on financial promotions. Since last October, over 1,000 warnings have been issued to these companies. This is to ensure that crypto companies are registered with the FCA before they can promote their services to clients in the UK.
Lucy Castledine, the director of consumer investments at the FCA, mentioned that they will continue to take action against firms that are operating illegally. So far, their efforts have led to the removal of 48 apps from UK app stores. The FCA is also working with third parties, such as social media companies, to remove illegal websites promoting crypto services.
In addition to issuing warnings, the FCA has also published guidance for registered firms on best practices. One key requirement is for firms to verify whether a consumer is a restricted, high-net worth, or certified sophisticated investor before sending them financial promotions. While most firms are doing a good job of allowing customers to self-categorize, there are some cases where companies are guiding consumers on what to enter, which is considered poor practice by the FCA.
Overall, the FCA is committed to ensuring that crypto firms play by the rules and protect consumers in the UK market. With the increasing popularity of cryptocurrencies, it is important for regulators to stay vigilant and take action against those who are not following the guidelines. By issuing warnings and working with other parties to remove illegal promotions, the FCA is sending a clear message that compliance is non-negotiable in the crypto industry.