UK launches crackdown on 'misleading' cryptocurrency ads
LONDON — The U.K. government says it will bring cryptocurrency ads under tighter scrutiny and crack down on «misleading» claims that may cause investors to lose money.
Finance Minister Rishi Sunak plans to bring the ads under the same rules for financial promotions, according to proposals announced Tuesday.
The government will introduce legislation to amend existing laws on financial advertising to include crypto. The regime requires firms to be authorized by regulators if they want to promote investment products.
The Financial Conduct Authority, a U.K. watchdog tasked with regulating financial firms, will soon start consulting on their proposed financial promotions rules for cryptocurrencies, the government said.
«Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest — but it's important that consumers are not being sold products with misleading claims,» Sunak said in a statement.
The FCA has attracted criticism for not taking action against crypto ads, which flooded London's underground rail network and buses in the past year as interest in bitcoin and other digital currencies has risen.
The FCA warns cryptocurrencies are not regulated, and that people investing in them should be prepared to lose all their money. While the regulatory body doesn't have any say over the crypto market specifically, it is getting tougher on companies operating in the sector.
Last June, the watchdog hit Binance, the world's largest crypto exchange, with a sharp warning saying the firm is not authorized to undertake any regulated activity. While Binance can still sell its services to U.K. residents through its website, it must show a notice explaining its British unit is not regulated.
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