UK’s FCA eyes crypto ad regulation, denounces ‘refer-a-friend' offers

Follow us on Google News:
 UK’s FCA eyes crypto ad regulation, denounces ‘refer-a-friend' offers
Image source: © Allexxandar | Megapixl

Headlines

  • The UK's Financial Conduct Authority (FCA) has denounced “refer a friend” crypto promotions.
  • The FCA's Sarah Pritchard, executive director of markets, feels people are prone to crypto investing with such incentive schemes despite not knowing its risks. 
  • This comes just a day after Chancellor Rishi Sunak announced the FCA seeks to regulate crypto marketing.

The UK's Financial Conduct Authority (FCA) has denounced “refer a friend” crypto promotions, thereby calling for a tightening on crypto regulation. The regulator felt such incentive schemes often urged people to get into the world of digital currencies without understanding the risks they bring.

Therefore, it made it clear that it would like to ban all incentive schemes such as refer-a-friend bonuses or new joiner freebies in the future. The regulators on 19 January toughened their stance on financial advertising in lieu of the concerns of how easily people are prone to make such high-risk investments.

Ask FCA's Sarah Pritchard, executive director of markets, and she would tell you that the need for protecting investors is the main criteria of the regulator. Pritchard feels that with such incentive schemes, more people are prone to venturing into investment products of which they don't have a clear understanding and thereby are susceptible to misinformation or being misled by fancy schemes.

Also read: Is UK edging closer to crypto regulation?

Crypto advert crackdown

This, somewhat of a crackdown, comes just a day after Chancellor Rishi Sunak announced that the FCA seeks to regulate crypto marketing. The regulators, off late, have kept a strict vigil on how crypto ads are being portrayed and have penalized exchanges and firms.

Previously, the Advertising Standards Authority (ASA) had penalized Coinbase, Kraken, Crypto.com, Papa John's GB, etc., for flagrant disregard of crypto advertising rules by displaying misleading and irresponsible ads. But now, with crypto marketing coming under the FCA lens, the regulator could enforce accuracy and make sure adverts adequately warn about the associated risks. 

Crypto regulations on the horizon?

These latest developments could signal UK's intention to impose crypto regulations soon. Recently, a dedicated committee or a panel was formed to oversee or draft a plan for crypto regulations.

Also read: Why does UK Treasury want to remove blockchain from crypto definition?

The committee consists of members of Parliament and members of the House of Lords. Members of the committee hinted that the panel's main objective is to check financial crimes and consumer protection.

Lisa Cameron MP, chair of the Crypto and Digital Assets APPG, feels that with many individuals embracing blockchain technologies in multiple ways, there is a need for a proper rulebook for crypto and digital asset promotion. This is critical to ensure that consumers are well aware of what they are getting into and are pros and cons of it. 

All in all, the latest move is a clear indication that crypto regulation in the UK is no more just a concept. Several wheels in motion are in place, and very soon, we could see influences. 

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK