The UK's Financial Conduct Authority has issued 146 alerts about crypto assets promotions on the first day that new rules came into force governing the marketing of crypto investments.
Since 8 October 2023, firms wishing to promote cryptoassets in the UK must, by law, be authorised or registered by the FCA, or have their marketing approved by an authorised firm. Under FCA rules, promotions must also be clear, fair and not misleading, labelled with prominent risk warnings and must not inappropriately incentivise people to invest.
The FCA has established a 'Warning List' to help consumers understand where firms' promotions may be breaking the law and to consider the promotion with the full information available.
With the deadline fast approaching last month, the watchdog fired off a warning to unregistered overseas cryptoasset firms, threatening fines and imprisonment for those who fail to comply with the new rules.
In a letter sent out to crypto firms marketing to UK customers headlined 'final warning', the watchdog bemoaned the lax response from overseas companies.
"We are concerned by the poor engagement from many unregistered, overseas cryptoasset firms who have UK customers on this important change," wrote the FCA. "Many of these firms have refused to engage with the FCA despite our best efforts. For example, only 24 firms responded to a survey that was sent to over 150 firms."
Firms that fail to engage will be in breach of section 21 of the Financial Services and Markets Act 2000, the regulator warns.
"This would be a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both," states the FCA. "We will take action against firms illegally promoting to UK consumers including, but not limited to, placing firms on our Warning List and taking steps to remove or block any illegal financial promotions such as websites, social media accounts and apps."