Attention to promoting cryptocurrencies in the UK! Unauthorized individuals or those not registered with the FCA may face criminal liability.

At the end of June, the Financial Services and Markets Act (FSMA) was approved by King Charles in the UK, granting regulatory authorities the power to oversee cryptocurrencies and stablecoins. The Financial Conduct Authority (FCA), responsible for regulating financial markets, protecting consumers, and promoting financial stability, has also been active recently. In addition to introducing a 24-hour cooling-off period for first-time investors and banning referral bonus schemes, the FCA has issued letters reminding cryptocurrency firms to comply with financial promotion rules or face criminal charges. The directive will take effect from October 8 and will apply to overseas firms selling their products to UK customers.

FCA Sets Strict Rules for Cryptocurrency Promotion

According to the letter, cryptocurrency firms must comply with the Financial Services and Markets Act (FSMA) Section 21 regulations and ensure that their financial promotions are fair, clear, and not misleading. Additionally, cryptocurrency firms should consider whether they need authorization or registration from the FCA to conduct their business legally.

There are four ways to legally convey financial promotion information to UK consumers:

1. Promotions carried out by authorized persons
2. Promotions carried out by unauthorized persons but approved by authorized persons
3. The promotion carried out by a cryptocurrency firm registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR)
4. Promotions that otherwise meet the exemptions under the Financial Promotion Order

The order takes effect on October 8th, and any promotional activity conducted without using any of these methods will breach the FSMA Section 21, potentially leading to criminal offenses punishable by up to 2 years imprisonment, an unlimited fine, or both.

Individuals seeking registration with the Financial Conduct Authority (FCA) must be prepared for a rigorous application process, pay registration fees, and undergo a processing period of up to three months. The FCA also advises cryptocurrency firms to seek professional advice to ensure compliance with legal and regulatory requirements.

The FCA stated that it will continue to monitor developments in the cryptocurrency market and take necessary actions to ensure market integrity and consumer protection.