The UK Financial Services and Markets Act 2023 was recently passed into law to bring crypto assets under Britain’s broader financial regulatory regime. It amended the UK Financial Services and Markets Act of 2000, which included rules regarding the financial promotions.
The Financial Conduct Authority (FCA) has now warned crypto companies regarding the lack of engagement they have shown to these new rules. It added that it harboured particular concern for overseas firms promoting crypto asset firms to investors in the UK.
Consumers in Britain who are unclear on the risks involved in digital assets like cryptocurrency often consult wealth managers for independent financial advice in Shropshire, Derbyshire, and other counties. As IFAs, wealth managers can provide an unbiased and informed opinion of all types of assets, providing clarity on both risks and returns.
The new rules, which now contain a cooling-off period for new investors, are designed to make crypto product marketing more accurate and transparent. They prohibit firms from communicating invitations or inducements to participate in investment activity during business with a potential customer unless carried out or approved through a regulated entity, or when an exemption applies.
The “regulated entities” deemed capable of approving or conducting such promotions in the new crypto regime include firms authorised by the FCA, registered crypto-asset companies, or authorised firms that have passed regulatory gateway legislation (now with Parliament). However, just how these communications can be made and their contents is governed by complicated rules. As penalties exist for noncompliance ranging from fines to potential imprisonment, rigid adherence to the rules is crucial.
