Battle Against Crypto Misinformation: 450 Red Flags Raised By UK Regulator In 2023

The Financial Conduct Authority (FCA), an autonomous financial regulatory entity in the United Kingdom, has released a report outlining its measures concerning financial promotions. This includes a comprehensive account of its investigations and responses to advertisements related to cryptocurrencies, placing a particular emphasis on crypto-related promotions.

As of Feb 14, the FCA disclosed encountering notable non-compliance with the crypto promotion regulations implemented on Oct 8, 2023. The regulator conducted a comprehensive review of registered and unregistered crypto firms, identifying prevalent issues across the board.

However, this involves employing generic risk summaries without tailoring them to product-specific risks, like stablecoins or asset-backed coins. Additionally, firms are utilizing their regulated status for promotional purposes. The FCA also emphasized that companies assert crypto services’ safety, security, and user-friendliness without supporting evidence or acknowledging associated risks.

Number of consumer alerts issued against financial firms from 2021 to 2023. Source: FCA

The regulatory body cautioned companies about potential enforcement actions in response to continuous rules violations. It emphasized its commitment to taking necessary measures. From Oct 8 to Dec 31, 2023, the FCA issued 450 consumer alerts targeting digital asset firms engaging in illegally promoting cryptocurrencies. The regulator stated:

“We are collaborating with technology companies to eliminate and prevent illegal promotions, encompassing websites, mobile applications (apps), and social media accounts. As an illustration of our efforts, 35 apps were removed from app stores by the conclusion of Dec 2023 due to our interventions.”

2024 FCA Crypto Crackdown

Moreover, The FCA has cautioned cryptocurrency companies that it will persist in taking action against those engaging in illegal promotions throughout 2024. Expressing concerns, the regulatory body highlighted instances where regulated firms failed to fulfil their obligations while offering support services to cryptocurrency companies unlawfully promoting products to consumers in the United Kingdom.

At the same time, the regulatory authority disclosed that it mandated the removal or modification of more than 10,000 financial-related advertisements in the U.K. in the year 2023.

Number of promotions withdrawn or amended from 2021 to 2023. Source: FCA

In 2023, the FCA emphasized that it received over 24,000 reports concerning potential unauthorized businesses. The agency clarified that these reports were escalated when credible evidence of a breach was identified. It urged consumers to persist in reporting misleading advertisements and potential scams through its official channels.

Related Reading | Solana Memecoin Bonk Spikes 7% Amid Potential Revolut Listing

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

Comments (No)

Leave a Reply