Whether you live in the UK or use the type of technology you use, companies marketing “eligible cryptoassets” to customers in the UK will need to comply with the Financial Conduct Authority’s (FCA) financial promotions regime. , the UK’s financial regulator. . These measures will have a significant impact on the way cryptoasset businesses, globally, market their products to customers in the UK, particularly cryptocurrency businesses that are not registered with the FCA.
We published a Cooley Customer Alert summarizing the plan in March 2023.
The FCA now has issued a “final warning” reminding companies promoting cryptoassets to UK consumers that they must prepare for the scheme. The letter notes that the FCA has had constructive and productive conversations with some firms about how they can meet the regime’s requirements, but also mentions the low engagement of many unregistered foreign crypto-asset firms with UK customers.
It’s worth noting that this “final warning” isn’t just for cryptoasset companies. The FCA specifically highlights that it expects social media companies, search engines and app stores to play their part in ensuring that illegal financial promotions are not communicated to UK consumers by crypto companies. unregistered assets and highlights that these intermediaries risk committing money laundering offences. under the Proceeds of Crime Act 2002 (POCA) if they support unregistered crypto-asset companies, for example by passing on their advertisements. In a similar vein, the FCA reminds these companies that illegal promotions of cryptoassets will be considered “unlawful content” under the new Online Safety Bill – and that the FCA and Ofcom are working closely on this topic.
The FCA letter warns that the illegal promotion of cryptoassets to UK consumers will breach the Financial Services and Markets Act 2000 and could lead to the FCA taking action to remove or block websites, accounts and social media applications, and/or civil or criminal enforcement actions. Contracts resulting from illegal promotions may also be unenforceable against UK consumers.