Written by Grace Aimilie Du’Arte-Dulaine and paralegal Holly Joseph.
This week, the FCA has identified three common concerns with cryptoasset financial promotions:
1. Promotions claiming the safety, security or ease of using cryptoasset services, and not emphasising the risks involved.
2. Risk warnings having small fonts, hard-to-read colouring or non-prominent positioning, and thus not being visible enough.
3. Firms failing to offer enough information to customers about the risks associated with products being promoted.
The FCA is ensuring that authorised firms that approve cryptoasset financial promotions are taking their regulatory obligations seriously, and have made it clear that if this is not the case, the FCA will take measures to prevent such firms from approving cryptoasset financial promotions.
In addition, the FCA has stated that they are collaborating with a number of businesses, including social media platforms, app stores, and domain name registrars to remove or block illegal promotions.
Since the regime went into effect on October 8, the FCA has issued 221 alerts identifying firms that may be illegally communicating cryptoasset promotions. So, before investing in cryptoassets, the FCA advises that consumers review the warning list to understand where firms’ promotions may be illegal.
The link to the warning is here: https://www.fca.org.uk/news/statements/common-issues-crypto-marketing