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FCA’s director of markets revealed the agency’s commitment to helping ASA tackle crypto adverts that provide unclear and misleading information about the space.
The Advertising Standards Authority (ASA) of the UK has issued a red alert asking more than 50 companies to go through their crypto services adverts and ensure they are compliant with new advertising regulations in the country.
Guy Parker, a top executive of the advertising regulator said that the interest of the body in the industry is tied to the enormous growth the space has recorded in recent times. According to available data, there are over 2 million crypto investors in the UK alone.
“This is a ‘red alert’ priority issue for us and we’ve recently banned several crypto ads for misleading consumers and for being socially irresponsible,” wrote the regulator.
This development is in congruence with the UK’s top financial watchdog commitment to tighten its oversight functions over the crypto community. The Financial Conduct Authority (FCA) is not only looking to compel firms to make better adverts about crypto services, but also keep them from offering incentives to entice investors.
Some of the affected firms include leading US-based crypto exchanges Coinbase, eToro, Luno, and fast-rising Crypto.com.
New Crypto Ad Regulations in the UK
Under ASA’s new regulations, the regulator is demanding that crypto firms looking to advertise the industry inform viewers that the industry is unregulated in the UK and at the same time, they have to inform them about the volatile nature of the investments which could lead to huge losses.
The regulation also warns against ads stating or implying that investment decisions are simple, easy, and right for everyone. It added that the ads should desist from communicating urgency and the need for making immediate buys and also inform the audience that its profits may be subject to Capital Gains Tax. This follows a recent trend of firms peddling their content by creating a sense of fear of missing out or that investing is a low-risk commitment.
The concerned firms have until May 2 to make sure their ads are compliant with the new regulations.
Joining Efforts for Crypto ad Crackdown
Regulators in the UK have become increasingly wary of the crypto industry. FCA’s director of Markets, Sara Pritchard, revealed the agency’s commitment to helping ASA tackle crypto adverts that provide unclear and misleading information about the space.
Pritchard also warned investors to be cautious of ads promoting high ROIs while urging them to conduct their own research before making any investment decisions.
Notably, FCA has repeatedly warned crypto investors to be prepared to lose all of their money.