UK Publishes Plans to Regulate Crypto Ads

The UK government has today published its plans to strengthen the rules relating to crypto advertisements.

In an effort to protect retail investors from falling prey to misleading crypto ads, the UK government will bring cryptocurrency advertising and marketing within the remit of the existing rules on “financial promotions”.

Currently, the UK’s financial promotion rules apply to products such as stocks, shares, and insurance, and require advertisers to ensure that ads relating to these products are “clear, fair and not misleading“.

Applying financial promotion rules to cryptocurrencies would ensure that people have the appropriate information to make informed investment decisions.

It’s estimated that around 2.3 million people in the UK own some cryptocurrency. However, the UK government said it was concerned that a lot of people may not have a clear understanding of what they are investing in. According to research conducted in the UK, it was found that consumers who are persuaded by adverts are much more likely to regret their purchase.

Chancellor of the Exchequer, Rishi Sunak commented on the plans, stating that while “crypto-assets can provide exciting new opportunities, offering people new ways to transact and invest”, he also believes it’s “important that consumers are not being sold products with misleading claims”.

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The new crypto advertising rules will be introduced through the implementation of secondary legislation, which will then allow the UK’s Financial Conduct Authority (FCA) to update its rulebook on financial promotions. A transitional period of about six months will apply after the publication of the rules.

We also reported earlier that Spain has begun to regulate crypto promotions.