FCA details penalties for firms breaching crypto marketing rules

investmentweek.co.uk:

'From this October, crypto firms must market to UK consumers clearly, fairly and honestly.'

The rules are set to come into force from 8 October, and will offer a greater degree of protection for consumers by making the marketing of cryptoassets and related products «clearer and more accurate», the FCA said.

Breaching the rules will effectively amount to a criminal offence, which will be punishable by an «unlimited fine» and/or up to two years' imprisonment, the FCA said today (7 September).

Some of the changes will include the introduction of a 24-hour cooling off period for first time investors, while firms may be given up to 8 January 2024 to implement greater technical developments.

FCA clamps down on marketing of cryptoassets

This is because companies will need to apply for the «flexibility which would then allow them time to make the required back-office changes successfully», the FCA explained.

From next month, the marketing of cryptoassets will need to feature prominent risk warnings and must not «inappropriately incentivise» consumers to invest, it added.

The incoming rules will apply to any firm, whether based in the UK or abroad, that wishes to market crypto products to UK consumers.

Lucy Castledine, director of consumer investments at the FCA, said crypto firms marketing to UK consumers will need to do so «clearly, fairly and honestly», and «provide risk warnings people understand» from October.

«As a proportionate regulator, we are giving firms that apply a little more time to get the other reforms requiring technology and business change right. We will maintain our close eye on firms during this extended implementation period,» she added.

«We are concerned by the failure of many overseas and unregulated