New rules in the UK for the promotion of high-risk assets with crypto being one of the main targets of the new regulation.
The FCA outlined stricter guidelines for the promotion of high-risk financial products and is awaiting legislation’s passage to see how cryptocurrency promotions will fall under its purview.
According to a press release dated August 1, the Financial Conduct Authority (FCA) of the United Kingdom has outlined new rules in the UK i.e stricter guidelines for the marketing of high-risk investment products, however, the new guidelines do not yet apply to bitcoin advertising.
Before releasing definitive guidelines for the sector, the FCA will wait for legislation to be passed to evaluate how crypto marketing falls under its purview, according to the press release.
The regulator claims that cryptocurrencies are high-risk investments, and anyone considering investing in them should be aware that they could lose everything. As a result, the guidelines for marketing cryptocurrencies will adopt the same methodology as the new guidelines published for other high-risk assets.
The new regulations require companies to communicate risk warnings in a clear and visible manner while outlawing investment incentives like referral programs.
According to the regulator, the restrictions are a component of the FCA’s consumer investment strategy, which aims to decrease the number of investors in high-risk assets. The FCA took its action in response to worries that a sizable portion of investors in high-risk assets are unaware of all the dangers involved and do not consider losing money to be one of those risks.
This year, the FCA has taken a proactive approach to combat financial marketing. The FCA intervened in 4,226 commercials as of July 2022 and ordered that they be changed or withdrawn.
Markets Executive Director for the FCA, Sarah Pritchard, stated:
‘We want people to be able to invest with confidence, understand the risks involved, and get the investments that are right for them which reflect their appetite for risk.”
Pritchard claims that because of the possibility of consumers turning to high-risk investments for better returns as a result of rising living expenses, it is more crucial than ever that high-risk financial products have the appropriate risk warnings.
Although the FCA has made clear that it intends to keep watching the cryptocurrency market, the U.K.’s crypto strategy is now uncertain due to the state of the government
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