The Financial Conduct Authority (FCA), an independent regulatory body in the United Kingdom, has released a comprehensive report outlining its actions against financial promotions, specifically focusing on advertisements related to cryptocurrencies. On February 14th, the FCA announced that it had discovered “significant levels of non-compliance” with the crypto promotion rules implemented on October 8, 2023. The regulator thoroughly examined both registered and unregistered crypto firms, identifying common issues.
One of the main issues found was the use of generic risk summaries that failed to address product-specific risks, such as stablecoins or asset-backed coins. Additionally, some firms were found to be using their regulated status in a promotional manner. The FCA also noted that firms were making claims about the safety, security, and ease of use of crypto services without providing supporting evidence or acknowledging the associated risks.
The regulator issued a warning to firms, stating that it would take action against persistent breaches of the rules and potentially utilize enforcement actions when necessary. Between October 8 and December 31, 2023, the FCA issued 450 consumer alerts against digital asset companies that were illegally promoting cryptocurrencies. The FCA emphasized that it will continue to take action against firms issuing illegal promotions in 2024. Furthermore, the FCA expressed concerns about regulated firms failing to meet their obligations when providing supporting services to crypto firms that are illegally promoting products to consumers in the UK.
In addition to addressing crypto-related promotions, the FCA also reported that it had ordered the withdrawal or amendment of over 10,000 finance-related advertisements in the UK in 2023. Furthermore, the FCA revealed that it had received more than 24,000 reports on potential unauthorized businesses in 2023. These reports were escalated when credible evidence of a breach was identified, and the FCA urged consumers to continue reporting misleading advertisements and potential scams through its official channels.