Starting today, the FCA rolled out fresh rules regarding how "qualified crypto assets" can be advertised and promoted. Honestly, it seems like customers of crypto businesses won't feel much of a difference, aside from the prohibition of those "refer a friend" schemes and bonuses for new sign-ups.
Here’s a quick rundown of the new limitations: https://www.asa.org.uk/news/financial-conduct-authority-rules-on-advertising-cryptoassets.html
Check out the full policy here: https://www.fca.org.uk/publication/policy/ps23-6.pdf
And here’s the FCA's take on what to expect: https://www.fca.org.uk/news/press-releases/fca-sets-expectations-ahead-incoming-crypto-marketing-rules
Looks like there is an emphasis on making sure marketing businesses provide the necessary risk assessments for their customers, plus improving how they handle customers' feedback and communication channels[1]. If I'm not wrong, some of the rules or guidance have been published before this new rule came out[2]. CMIIW.
[1] https://www.fca.org.uk/publications/good-poor-practice/firms-preparations-cryptoasset-financial-promotions-regime
[2] https://www.fca.org.uk/publication/guidance-consultation/gc23-2.pdf
I don't see anything wrong with these new rules. Most crypto firms sometimes engage in some advertisement that doesn't reflect the nature and risk involved in investing in such a product or coin. These rules will enable the UK populace to be exposed to true and balanced promotional material that is void of any form of deception or hidden agenda. If investors know the risk that is involved in a particular project and decide to invest in it, they would have no one to blame. It will be fair if the customer and investor are aware of the true picture of the project and not be fed with fake media hype. The good news is that crypto firms can carry out any form of advertisement without restrictions.
I dont see much effectiveness in such regulation rules, because in social networks or telegram groups these rules are very easy to bypass or these rules do not work. Unfortunately, this does not stop scammers, but it does prevent good projects from developing, because they need a whole team of lawyers.
I agree. I don't quite understand what was the motivation behind it. It kind of looks like one of those things that regulators do just to show they're doing "something" and to justify their existence.
What really annoys me is that they banned "refer a friend" type of programmes, whereas similar ones are allowed for gambling websites or CFD platforms, where vast majority of players/traders lose money. So doesn't look like there's much logic behind it.
A good amount of money is always allocated to any project, so regulating something is actually also very profitable
The governments themselves are to blame for the fact that the banking system is no longer as reliable as it was 30 years ago, and any bank account can be either blocked or attacked by fraudsters with the help of bank employees.
Does refer a friend mean referral links because they have the same meaning? If that is true, does this include all personal ads, meaning that only commercial ads are allowed?
Doesn't that mean airdrop? New joining bonuses work exactly on the same principle, as new members receive profits for joining early.
Keeping the ads open is a good step.
This is more precisely newcomer, not earlycomers (refers to user preferences, not business preferences). This is not limited to services that have been operating for several years such as exchanges that are synonymous with referral businesses.
If you are interested in what is happening in the UK, then lawyers advised me to read these comments
https://www.legislation.gov.uk/ukpga/2023/29/pdfs/ukpgaen_20230029_en.pdf
Crypto exchanges need to obtain licenses both to operate and to advertise their services.
And therefore, any information in English for UK citizens may be regarded as operating without a license in the UK and subject to fines.
Exchanges will flee the UK.
Probably depends on the kind of airdrop. i.e. if it's organised by a business, the tokens that are being given away are already traded and the purpose is to attract new customers - then I'd imagine it'd fall under new rules. But if the airdrop is for new tokens that are not yet traded, so they're market value at the moment of an airdrop is zero, and a team of developers organises it, then it's probably outside of those regulations. That's just my interpretation though.
Thanks, that's a pretty chunky document though, with nearly 300 pages. But from the emails I got from various exchanges regarding the new regulations, it doesn't seem like the new restrictions are that severe.
And there might be a way to bypass some of them, e.g. Binance partnered up with an FCA-registered entity and will be delegating all restricted activities to them.
Isn't that the intended goal of this new regulation? I see this as a cost-effective move for Binance since making a dedicated marketing firm in the UK is probably expensive for their needs. I'm pretty sure the government won't fine or sanction any exchange or business who do the same thing as Binance unless I misunderstand how the regulation works.
If you want to do business in the UK, then you need to understand what is happening there. I communicate with lawyers from a crypto company and they share some information with me.
Restrictions are always created so that they can be circumvented, but only selected large crypto exchanges will be able to do this.
https://www.cnbc.com/2023/10/30/uk-confirms-plans-to-regulate-crypto-industry-with-formal-legislation.html
"The U.K. government published its response to a consultation paper issued earlier this year, which outlined recommendations on how the crypto industry should be regulated.
The government received views from crypto native and fintech companies, industry associations, traditional financial services firms, members of the public, academia, and legal and consulting firms.
The government aims to introduce laws for the crypto industry before Parliament by 2024, according to the paper."