The UK’s Financial Conduct Authority (FCA) has amplified its regulatory stance on cryptocurrency, implementing robust measures to safeguard consumers. This move comes in the wake of frequent criticism of the sector’s unregulated environment and its volatile nature that sometimes promise high returns.
From October, companies advertising cryptocurrency services in the UK must issue a clear warning about potential losses from such high-risk investments. Additionally, the FCA introduces a cooling-off period for new crypto investors and prohibits referral bonuses intended to spur crypto investment.
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Sheldon Mills, FCA’s Head of Consumers and Competition, emphasizes that the new rules allow consumers to make informed choices based on appropriate risk warnings and sufficient contemplation time.
The FCA’s intervention follows the UK’s legislative effort earlier this year, which aimed to regulate crypto promotion akin to its gambling industry. Su Carpenter, Director of Operations at CryptoUK, warns that these rules may pose a barrier for newcomers, unfairly advantage established firms, and possibly motivate unauthorized firms to operate offshore. This could ultimately undermine consumer protection and put UK firms at a competitive disadvantage.
The FCA’s actions mirror tightening regulations in the United States. Recently, the Securities and Exchange Commission (SEC) sued Coinbase and Binance on allegations of unlawful facilitation of crypto trading and numerous securities law violations, reflecting a growing global concern over the largely unregulated crypto market.
This news is based on a report by MalayMail.
