FCA shows it means business as it starts to enforce crypto marketing regime

A restriction on marketing cryptoassets in the UK took effect on 8 October 2023. Cryptoasset firms that want to market their services in the UK must make sure that they comply with the financial promotion regime and follow one of the four legal routes to making cryptoasset promotions. There are serious risks for firms which fail to comply.

From warning to action

The Financial Conduct Authority has been quick off the mark to enforce the new cryptoasset promotion regime. In the first day after the new rules came into force the FCA added 146 unauthorised cryptoasset firms to its Warning List. This is not a surprise. In a previous article we flagged the FCA's “final warning” for cryptoasset firms and its willingness to take action against firms to enforce the regime.

On 10 October 2023 the FCA also prevented a consumer credit firm from approving financial promotions for cryptoassets. rebuildingsociety.com had agreed to approve promotions for Binance, a global cryptoasset exchange. According to a blogpost on its website, rebuildingsociety.com says that it has appealed the decision.

FCA’s toolkit

These are not the only tools the FCA has to enforce the extended financial promotion regime. Its final warning letter noted how it can:

• block or forcibly remove illegal content from the internet, including social media platforms, app stores and search engines
• apply for injunctions
• seek payment of compensation
• bring criminal prosecutions

Contracts entered into as a result of unlawful communications may also be legally unenforceable against UK consumers.

Cryptoassets firms, especially those that do not have a registered office in the UK, should carefully consider their approach to marketing cryptoassets to UK consumers. Find out more about the new regime.

With thanks to Elton Qemali for writing this post.