The Financial Conduct Authority (FCA) — an independent financial regulatory body in the United Kingdom — has published a report detailing its actions against financial promotions, including its findings and actions against crypto-related advertisements.
On Feb. 14, the FCA reported that it found “significant levels of non-compliance” on crypto promotion rules that came into effect on Oct. 8, 2023. According to the regulator, i reviewed both registered and unregistered crypto firms and identified common issues.
This includes the use of generic risk summaries without any amendments for product-specific risks, such as stablecoins or asset-backed coins, and using the regulated status in a promotional manner. Furthermore, the FCA also said that firms are making claims about the safety, security and ease of use of crypto services without supporting evidence or highlighting risks.
The regulator warned firms that it would take action against persistent breaches of the rules and would potentially use enforcement actions as necessary. The regulator highlighted that between Oct. 8 and Dec. 31, 2023, the FCA issued 450 consumer alerts against digital asset companies illegally promoting crypto. The regulator wrote:
“We are working with tech companies to remove and block illegal promotions, including websites, mobile applications (apps) and social media accounts. For example, our work has resulted in 35 apps being removed from app stores at the end of December 2023.”
The FCA also warned crypto companies that it will continue taking action against firms issuing illegal promotions in 2024. The FCA expressed concerns about regulated firms not meeting obligations when providing supporting services to crypto firms illegally promoting products to consumers in the United Kingdom.
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Meanwhile, the regulator also reported that it ordered the withdrawal or amendment of over 10,000 finance-related advertisements in the U.K. in 2023.
The FCA highlighted that in 2023, it received more than 24,000 reports on potential unauthorized businesses. The agency said that the reports were escalated when there was credible evidence of a breach, and it urged consumers to continue to report misleading advertisements and potential scams through its official channels.
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