FCA tightens rules on crypto advertising.

The Financial Conduct Authority (FCA) of the UK has proposed new rules for crypto companies to market their products and services to customers. These regulations aim to prevent false claims and unrealistic promises, and require more transparency and balanced information. The FCA has also opened consultations until August 10, and if passed, the rules will require companies to introduce a cooling-off period for first-time investors in the UK who want to purchase crypto assets from October 8, 2023.

New Rules For Firms Promoting Crypto Products Or Services

The FCA wants to treat cryptocurrencies as high-risk investments and has forced firms to rectify 8,582 misleading promotions in 2022 alone. The regulator is concerned that new investors don’t fully understand the risks of these volatile, unregulated assets. Therefore, firms promoting crypto products or services will need to include a clear risk warning such as: ‘Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.’

A comprehensive set of guidelines will be published, clarifying the rules that firms must follow to ensure that advertisements regarding cryptocurrencies are not misleading. Promotions that attract crypto investors, such as ‘refer a friend’ programs, will no longer be allowed.

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US Treasury Secretary Yellen Wants More Regulation

Janet Yellen, the current Secretary of the United States Treasury and a former Chair of the Federal Reserve, has voiced her concern over the lack of regulation in the cryptocurrency market. She contends that the United States Congress should be doing more to pass laws that will protect investors and curb illicit activity.

The era of unchecked crypto hype by companies may be coming to an end in the UK. While regulation could curb crypto crime and shield consumers, lawmakers need to be careful not to stifle innovation. The crypto market continues to grow rapidly, and many see digital assets as the future of finance.

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