According to the new rules. How crypto companies prepared for the new regime

United Kingdom Great Britain
United Kingdom Great Britain

On October 8, a new cryptocurrency advertising regime came into force in the UK, proposed by FCA. The regulator has already flagged those who do not comply with the rules, and companies have hastily updated apps and websites.

Since the regulations came into force, the agency has updated the list of unauthorized firms that “should be avoided.” The list has been expanded to include 143 companies, including HTX (formerly Huobi) and KuCoin. Crypto exchanges Binance and Coinbase were flagged as undesirable back in 2021 and 2022.

“We expect businesses, including social media platforms, app stores, search engines, domain name registrars and payment companies, to heed the warnings we have issued and play their part in protecting UK consumers from unlawful promotions,” it said. FCA.

Under the new regime, all organizations wishing to promote digital assets must be “authorized or registered by the FCA, or have their campaign approved by an authorized firm.”

Promotional materials must be “clear, fair, not misleading, carry prominent risk warnings and must not inappropriately induce people to invest.”

The rules also provide for a 24-hour cooling-off period for new clients to consider investing. Thus, the user will be able to buy cryptocurrency only a day after registration.

Various promotions, including referral programs and “refer a friend” bonuses, are also prohibited by the FCA.

“Consumers should still be aware that cryptocurrency remains largely unregulated and carries high risk. Those who invest must be prepared to lose all their money,” the regulator’s representatives emphasized.

Failure to comply is considered a criminal offense and is punishable by an “unlimited fine and/or up to two years’ imprisonment.”

Trading platforms and other crypto firms have already begun to adapt to the new legislation.

According to Decrypt, Coinbase and Revolut notified their customers via email of the changes, which include additional “risk disclaimers” for crypto transactions and a request to update their mobile app.

Binance has launched a dedicated webpage for UK users. The exchange has also relaunched its phone app, claiming compliance with the new rules after recently deregistering with the FCA.

Company representatives noted that gift cards, referral bonuses, and access to the news, “Academy” and “Research” sections are not available to British clients.

“Compliance with laws around the world remains a top priority for Binance,” the press release said.

The OKX exchange also announced changes to its internal rules. The platform has reduced the number of available tokens to just over 40 and added “clear warnings about the risks.”

However, not everyone had time to prepare for the innovations. In September, the Bybit exchange announced the suspension of operations in the UK. The company cited tightening regulation, while the company did not receive a license from the regulator.

In August, payments giant PayPal “temporarily” suspended its cryptocurrency purchasing functionality for UK citizens. Representatives of the service clarified that work is underway to “comply with new regulatory requirements.”

Let us remind you that the Kraken exchange, the infrastructure provider MoonPay, the Gemini trading platform of the Winklevoss brothers, the Andreessen Horowitz venture fund and the custodian Komainu have already received approval to operate in the UK.

In July 2023, Ripple submitted an application to the FCA to register as a cryptocurrency company. The department also included the Bitstamp bitcoin exchange in the register.

Previously, the department reported that out of 291 applications from crypto companies, only 38 were approved – about 13%.

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