UK to tighten regulations on cryptocurrency-related ads to improve consumer protection, says paper.
The government of the United Kingdom said today in a statement that plans to strengthen the rules governing cryptoasset advertisements to bring them in line with other financial assets.
The rules will increase consumer protection while encouraging innovation, the Treasury said. The institution indicates that the proposed legislation will also give the UK’s financial watchdog, the Financial Conduct Authority (FCA) the power to regulate the cryptomarket more effectively.
The Treasury statement
According to the Treasury statement, the government plans to legislate to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. misleading cryptoasset promotions.
Indicates that around 2.3 million people in the UK own a crypto asset and its popularity is growing, “but the research suggests that understanding of what cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. actually is is declining, suggesting that some users may not fully understand what they are buying. This poses the risk of these products being sold inappropriately,” the statement said.
The document of response to the consultation on cryptoasset promotion published today, states the government’s plan to bring the promotion of cryptoassets within the scope of financial promotion legislation. “ This means that the promotion of qualifying cryptoassets will be subject to FCA rules in line with the same high standards to which other financial promotions such as shares, stocks and shares and insurance products are subject.”
“This will balance the desire to encourage innovation with the need to ensure that cryptoasset announcements are fair, clear and not misleading,” the statement said.
Commenting on this, Finance Minister Rishi Sunak said:
Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest, but it is important that consumers are not sold products with misleading claims.
We ensure that consumers are protected, while supporting innovation in the cryptoasset a cryptoasset is any digital asset that uses cryptographic technologies to maintain its operation as a currency or decentralized application. market.
It’s not a ban on crypto
This makes it clear that there will be no ban. The document further states that “the government is keen to support the opposite of Resistance, it is a threshold that crypto’s price doesn’t fall below. innovation in cryptoassets and recognises the potential benefits of certain products such as stablecoins, such as providing a more efficient means of payment, and in 2018 the government launched Cryptoasset Taskforce, which continues to lead the UK’s regulatory response to the cryptoasset market.”
However, “the research carried out by the FCA highlighted the potential for misleading advertising of cryptographic products to cause consumer harm”.
The Government’s decision to bring such advertisements within the scope of regulation will mitigate the risks of consumer harm by ensuring that people have adequate information to make informed investment decisions.
This will be done through secondary legislation to amend the Financial Promotion Order, which sets out the investments and activities to which the financial promotion regime applies. Under the Financial Services and Markets Act 2000, a firm cannot promote a financial product unless it is authorised by the FCA or the PRA, or the content of the promotion is approved by a firm that is. Firms wishing to promote such investments and activities must comply with binding rules that financial promotions must be fair, clear and not misleading.
It also says that this will provide the Financial Conduct Authority of appropriate powers to regulate the market an area or arena, online or offline, in which commercial dealings are conducted. more effectively. The FCA will shortly consult on proposed financial promotions rules that will apply to cryptoassets.
More governments keep an eye on advertising
Thus, in the same week, UK joins Spain and Singapore who yesterday also reported restrictions and rules for crypto promotion.
In Spain, the Comisión Nacional del Mercado de Valores (CNMV), the government body in charge of regulating the securities markets in Spain, issued a circular yesterday, Monday, defining the new rules for crypto and cryptocurrency advertising. indicating the risk warnings that should appear in all campaigns.
Meanwhile, in Singapore, the Monetary Authority indicated : “The public should not be encouraged to engage in DPT (digital payment token) trading… [Firms] should not represent DPT cryptocurrency trading in a way that trivializes the high risks of trading operations.”
Likewise, this is not the first time that the UK has put the brakes on advertisements from cryptocurrency-related companies. In December banned crypto promotions from several well-known companies.
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