FCA sets deadline for crypto compliance
By Law News
From 8 October, all companies marketing cryptoassets to UK consumer must comply with the financial promotion regime.
The UK's Financial Conduct Authority (FCA) has warned companies that promote in crypto assets within the UK - including companies based overseas - must prepare to comply with the regime by the October deadline, or face a raft of consequences, including enforcement action.
In a letter sent out to companies on 4 July, the FCA says that unregistered or unauthorised cryptoasset businesses marketing to UK consumers should:
- Consider which of the four legal routes they will use to make their financial promotions, how they will meet the requirements of that route and the associated FCA rules that apply to cryptoasset promotions set out in PS23/6.
- Carefully consider how they will deal with UK customers if they are unable to communicate financial promotions to them. We expect firms to clearly communicate any changes to services they will provide to UK consumers and give consumers adequate time to respond to any changes before they go into effect.
- If firms decide to no longer provide services to UK consumers, we expect them to have in place orderly wind-down plans to minimise any impact on UK consumers. Firms may find our Wind-down Planning Guide useful in considering their plans.
The letter continues: "Promotions that are not made using one of these routes will be in breach of section 21 of the Financial Services and Markets Act 2000 (FSMA), which is a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both. We will take robust action against persons illegally promoting to UK consumers. This may include, but it is not limited to, placing firms on our warning list, taking steps to remove or block any illegal financial promotions such as websites, social media accounts and apps, and enforcement action."
The regulator says it will take robust action against persons illegally promoting to UK consumers. "This may include, but it is not limited to, placing firms on our warning list requesting take downs of websites, social media accounts, apps and all other promotions that are in breach, and enforcement action."