“`html
The UK’s Financial Conduct Authority (FCA) is intensifying its efforts to regulate the crypto sector, issuing alerts to unregistered platforms and pursuing legal proceedings against entities catering to UK citizens or endorsing digital currencies in the nation.
The FCA delivered hundreds of alerts concerning unauthorized crypto platforms in October, which included Elite Bit Markets, Nexure Gainbit, Plux Crypto, and HTX.
On Tuesday, the authority initiated a lawsuit against HTX for marketing crypto services to UK residents, as confirmed by an FCA representative to Cointelegraph. The FCA also mentioned:
“We have observed crypto firms responding favorably to our financial promotions standards; nevertheless, where we still detect inadequate practices, we will not hesitate to act when firms seem to be violating our regulations.”
Crypto firms must be registered with the FCA as per anti-money laundering regulations and adhere to the UK’s financial promotions guidelines, which came into effect in 2023, to market or deliver services to residents.
The UK’s intensified oversight of crypto businesses occurred amidst regulators in the nation relaxing rules by removing the prohibition on crypto exchange-traded notes (ETNs) and unveiling a blueprint for tokenized investment funds to maintain competitiveness with crypto-friendly nations like the US.
The UK imposes stringent regulations on crypto firms advertising services
Crypto businesses promoting their offerings in the UK must fulfill strict standards to conduct crypto-related advertisements or endorse digital assets within the nation, focused on safeguarding consumer risks.
The FCA categorizes financial instruments into three risk categories, initiating with Readily Realizable Securities (RRS), which include publicly listed firms deemed by the regulator to pose the least risk and have no advertising limitations.
Restricted Mass Market Investments (RMMI), encompassing most cryptocurrencies, are identified by the regulator as possessing a medium risk profile, permitting the investments to be advertised to the public under rigorous consumer protection protocols.
These include prominently displayed warnings about speculative risk, directing users to informational pages and other cues designed to inform the user and mandated know-your-customer protocols.
The regulations also restrict the types of incentives or rewards offered to consumers to encourage them to utilize a specific exchange or service.
Leaders at crypto firms that breach the UK’s advertising regulations could face two years in prison and other legal repercussions.
Nevertheless, the severe penalties have not deterred crypto advertisements in the country, according to the Financial Times.
The publication discovered that approximately half of all crypto advertisements flagged by the FCA from October 2023 to October 2024 persisted online despite warnings.
Magazine: UK’s dystopian AI murder forecasting system, will AI take your job? AI Eye
Source link
“`