Regulator plays sheriff as it takes on crypto marketing ‘wild west’
Crypto firms face a regulatory clampdown in the UK this year as the City watchdog cracks the whip on the “Wild West” landscape of crypto marketing.
In a new set of rules announced today, the Financial Conduct Authority (FCA) said it will force crypto firms to introduce a “cooling-off” period, during which time consumers can decide to cancel their purchase.
The watchdog is also set to ban “refer a friend” bonuses and force firms to put in place “clear risk warnings” as it seeks to ensure that those who buy crypto understand the risk.
Sheldon Mills, executive director at the FCA said: “It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.”
The new rules will come into effect from 8 October, setting the clock ticking for the UK crypto’s sector.
Susannah Streeter, head of money and markets, at Hargreaves Lansdown said the FCA had “shot out of the traps” with the changes and was “racing ahead with new rules to give consumers extra protection in the crypto Wild West”.
Regulators have been looking to tighten the guardrails in the sector and protect consumers from digital assets bandits after the high profile implosion of crypto exchange FTX last year.
The FCA’s move comes after a week of regulators tightening the screw on crypto.
The US Securities Exchange Commission has been on a warpath against the sector and this week sued the world’s two biggest coin exchanges, Binance and Coinbase, for flouting its rules.
A host of top US industry bosses have made overtures across the Atlantic in light of the clampdown, with Coinbase chief Brian Armstrong telling a London conference in April that the exchange could shift its headquarters across the pond.
Debates continue to swirl in the UK about the best way to approach the sector as adoption continues to rise. New data from the FCA shows that estimated crypto ownership has more than doubled from 2021 to 2022, with 10 per cent of 2,000 people surveyed saying they own crypto.