New UK Regulations Fall On Deaf Ears As 221 Crypto Firms Are Labeled Non-Compliant

Since the U.K. introduced new promotional regulations for crypto assets on Oct. 8, there have already been 221 breaches by various crypto firms.

That's according to the Financial Conduct Authority (FCA). Regulators intended for the new legislation to provide consumers with accurate information and risk warnings.

It now seems to be facing non-compliance from multiple quarters of the industry.

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Join the conversation at Benzinga's Future of Digital Assets conference on Nov. 14, where the evolving landscape of crypto regulations is expected to be a major discussion point. Participants and industry experts are keen to assess the implications of these recent breaches and deliberate on the future of crypto promotional norms.

The FCA identified three primary issues:

1. Misleading promotions that claim the ‘safety’, ‘security’, or convenience of using crypto services without sufficiently highlighting the associated risks.
2. Risk warnings that aren't adequately visible due to issues like small fonts, poor color contrast, or their placement in non-prominent positions.
3. A lack of sufficient information on product-specific risks in the promotions.

The FCA has been proactive in its approach by collaborating with businesses, including social media platforms, app stores, and search engines, to block or remove illegal promotions.

Payments firms are also being roped in to minimize U.K. consumers' exposure to firms issuing non-compliant promotions.

Furthermore, the FCA's "Warning List" is another initiative to safeguard consumers. It encourages them to check this list before investing in crypto.

The list offers insights into firms whose promotions might be flouting the law, enabling consumers to make well-informed decisions.

Despite the introduction of stricter marketing rules, the FCA reiterated that crypto assets remain high-risk and are largely unregulated.

In case of any discrepancies, consumers might not have access to protections and could face potential total losses.

To align crypto assets with other high-risk investments, firms promoting crypto assets in the U.K. are now mandated to either be registered or authorized by the FCA or have their promotional activities approved by an authorized entity. The promotional content must be transparent, fair, and accompanied by prominent risk warnings.

The FCA has been vocal about its expectations since February, urging firms to prepare for these regulatory changes.

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