On October 8th, the UK Financial Conduct Authority (FCA) will begin implementing new regulations regarding the promotion of digital assets. In a final warning, the FCA is urging all crypto entities to adhere to these new policies once they come into effect.
Lucy Castledine, Director of Consumer Investments at the FCA, stated that entities unable to comply with the rules should cease all operations and promotional activities. Starting next month, any companies attempting to continue their operations unlawfully will be considered in violation of the law.
Castledine added that the FCA would take specific enforcement actions to restrict access for non-compliant entities, including removing or blocking their promotions.
“Crypto platforms must also carefully review sponsorship arrangements they have with entities or individuals in the UK to ensure compliance with the upcoming rules,” Castledine explained.
In response to the impending regulations, some crypto entities have already begun withdrawing and temporarily halting their operations in the UK. Companies like PayPal and Luno have announced they will regularly suspend their crypto services for UK residents. Meanwhile, other entities, such as Bybit, are working to negotiate with regulators to continue operating while complying with the rules.
Regulator Finds Many Entities Uncooperative
Once the rules take effect, any promotions targeting UK residents must provide detailed information about the associated risks of their products. Additionally, each platform must ensure that consumers exposed to virtual currencies possess sufficient understanding and experience for investing.
The FCA had granted crypto entities a three-month adjustment period to comply with the regulations. However, in the process, Castledine admitted that the participation of many foreign crypto companies has been poor.
Out of 150 surveyed companies, only 24 responded to the FCA’s inquiries. Castledine added that the lack of involvement from these companies raises serious concerns about their readiness to comply with the new regulatory framework.
“UK customers rely on communication from companies to access and handle cryptocurrencies, so it is essential for all companies to be prepared to comply with the new policies once they are in effect,” she emphasized.
Number of Crypto Owners in the UK Doubles
Interestingly, ahead of the regulation’s implementation, public interest in cryptocurrencies has not waned. In fact, an FCA survey revealed that nearly one in ten people in the UK already owned cryptocurrencies last year, more than doubling from the previous year.
Sheldon Mills, FCA’s Executive Director of Consumers and Competition, emphasized that all digital asset activities are entrusted to the public. As a regulator, their role is to ensure that every crypto activity serves to protect the public while operating transparently and fairly.
“It’s up to individuals to decide whether to buy cryptocurrencies or not. Our rules provide consumers with time to make the right choice,” Mills added.
However, concerns have arisen regarding these new regulations. Harry Eddis, a lawyer at Linklaters, stated that the upcoming rules in the UK will significantly impact the market, making it increasingly difficult for people to access cryptocurrencies.
