The United Kingdom government recently announced that it would be implementing brand-new rules regarding crypto advertisements. They revealed on Tuesday that the purpose of these new regulations is to “protect consumers from misleading claims.” Specifically, the new rules will not only encourage innovation but will also increase consumer protection.
Rishi Sunak, the U.K. chancellor of the exchequer, stated that cryptocurrencies offer new and innovative opportunities, allowing consumers to find new ways to invest and transact. However, Sunak emphasized the importance of ensuring that consumers aren’t being misled in their purchases.
The new rules will ensure that all ads related to cryptocurrency are “fair, clear, and not misleading,” which is why they must first be brought within the scope of financial promotions legislation. Here’s the U.K. government’s explanation regarding the matter:
While emphasizing the importance of supporting innovation, the U.K. government states that “research undertaken by the FCA highlighted the potential for misleading advertising of crypto products to cause consumer harm.”
According to the U.K. Financial Services and Markets Act 2000, a business cannot promote a financial-related product unless they’re given authorization by the Prudential Regulation Authority (PRA) or the FCA. The only other way is to receive approval from a firm.
The U.K. Advertising Standards Authority (ASA) has recently been sniffing out false crypto-related advertisements. For instance, they banned seven crypto ads for various platforms in December, including Exmo, Coinbase, Luno, Coinburp, Kraken, Etoro, and even Papa John’s Pizza.
