FCA to ban referrals, joining bonuses as UK tightens crypto regulation

The U.K.’s Financial Conduct Authority (FCA) announced that from October 1, crypto would beryllium classified as “restricted wide marketplace investments,” a class reserved for higher-risk concern products.

Under the caller designation, advertisers and crypto firms look a raft of requirements, including promotional worldly to incorporate “clear hazard warnings,” bans connected incentives specified arsenic referrals and caller joiner bonuses, and the implementation of a 24-hour cooling-off period.

FCA examples of hazard warnings see notification not to expect extortion if thing goes incorrect and “[be] prepared to suffer each the wealth you invest.”

The FCA’s Executive Director of Consumers and Competition, Sheldon Mills, told The Guardian that investors indispensable recognize that cryptocurrency is simply a mostly unregulated industry, meaning determination is nary information nett erstwhile things spell wrong. He added:

“It is up to radical to determine whether they bargain crypto. But probe shows galore regret making a hasty decision. Our rules springiness radical the clip and the close hazard warnings to marque an informed choice.”

Figures from the FCA showed that estimates connected U.K. crypto ownership much than doubled betwixt 2021 and 2022, with 10% of survey respondents reporting owning cryptocurrency.

However, crypto transgression is besides connected the up. The FCA reported that 1,619 scam instances occurred successful 2019, climbing to 6,372 successful 2021 – representing a astir 300% summation successful cases.

U.K. crypto regularisation coming

The Financial Services and Markets Bill is nearing the last stages of passing into law. It represents a significant shakeup of fiscal law, giving the FCA and Prudential Regulation Authority (PRA) greater authorization to govern the fiscal sector, including the crypto industry.

A cardinal constituent of the Bill is the inclusion of crypto wrong the U.K.’s regulatory framework. Although it appears the FCA is taking a cautious attack to integer assets, Rohit Bhosale, Digital Bank Specialist astatine Persistent Systems, said the Bill was “a large measurement forward.” He added:

“With this development, I tin spot much and much radical venturing into the crypto space.”

Breaching the FCA’s “restricted wide marketplace investments” rules could effect successful a two-year situation condemnation and a fine.

The station FCA to prohibition referrals, joining bonuses arsenic UK tightens crypto regulation appeared archetypal connected CryptoSlate.