The UK’s Financial Conduct Authority (FCA) has announced that some crypto firms will receive extended deadlines to adhere to new marketing regulations, including a 24-hour cooling-off period for first-time investors.
In June, the regulator introduced stringent rules for the marketing of crypto assets, applicable to companies regardless of their global location. Most of these regulations are set to go into effect in October, requiring all marketing to be “clear, fair, and not misleading,” prominently display risk warnings, and avoid incentivizing investments inappropriately, such as through “refer a friend” bonuses.
However, firms may be allowed until January to implement features that require more extensive technical development, like the cooling-off period, but they must apply for this extension.
Lucy Castledine, the director of consumer investments at the FCA, commented, “As a proportionate regulator, we’re giving firms that apply a little more time to get the other reforms requiring technology and business change right.” At the same time, she urged firms to be prepared for the impending regulations: “We are concerned by the failure of many overseas and unregulated crypto firms to engage with us on the new rules. Come 8 October, we will be taking action against firms illegally marketing to UK consumers.”
Failure to comply with the marketing rules after the October deadline could result in severe penalties, including unlimited fines and up to two years in prison for those promoting crypto to UK customers unlawfully.