‘Prepare to comply’: UK regulator’s message to crypto firms
He United Kingdom‘s Financial Conduct Authority (FCA) has issued a warning to all crypto asset companies operating in the country, reminding them to ensure trading compliance before the October deadline.
According a letter dated July 4The FCA has stated that as of October 8, cryptocurrency companies marketing to users in the UK must comply with the financial promotions regime or face the consequences.
“From October 8, 2023, all companies marketing crypto assets to UK consumers, including companies based abroad, must comply with the financial promotion regime,” the letter wrote.
The FCA has outlined “four routes to legally communicate crypto asset promotions” that these companies can follow to ensure compliance.
These avenues include having a promotion approved or communicated by an authorized party, having a promotion created by a company registered with the FCA, or having a promotion qualify as exempt under the country’s Financial Services and Markets Act.
Failure to follow these guidelines can result in severe punishments for crypto companies, including two years in prison, an unlimited fine, or both.
“We will crack down on people illegally promoting to UK consumers,” the regulatory agency warned.
The FCA added that it will crack down on those who illegally promote to UK consumers, including placing companies on a warning list, removing or blocking any illegal financial promotion, such as websites or social media accounts, and the adoption of coercive measures.
To further encourage compliance, the FCA expects crypto companies to announce their offerings through registration under the Money Laundering, Terrorist Financing and Funds Transfer Regulations 2017 (MLR).
This means that companies must submit the necessary documents to the FCA and pay a registration fee. The FCA will then have a three-month evaluation period to review the submission.
42 companies have registered with the FCA
At press time, the FCA has listed 42 registered crypto companies that meet its requirements.
These include popular names like bit stamp, revolution, MoonPayand digital galaxy uk.
However, the total number of crypto asset companies operating in the UK is estimated to be much higher, indicating that many are still working to meet FCA regulatory standards.
The FCA originally announced the October deadline on June 8, urging crypto firms to adopt a marketing approach that allows clients a “cooling off period” to consider the risks of investing in digital assets.
In addition to complying with the trading regime, companies are also required to register with the FCA to carry out crypto asset activities in the UK.
The UK has been among countries that have stepped up regulatory efforts following some high-profile bankruptcies last year.
Last month, the country officially passed legislation to regulate cryptocurrencies and stablecoins as part of its broader post-Brexit financial regulatory reforms.
The new law, called Financial Services and Markets The bill will give regulators the authority to set a custom framework for the digital asset sector, supporting the “safe adoption of cryptocurrency in the UK.”