FCA אַרויסגעבן לעצט ווארענונג צו אַנרעדזשיסטערד קריפּטאָ פירמס: נאָכקומען אָדער פּנים קאַמף!

On 21st September 2023, the Financial Conduct Authority of the U.K. released a public letter concerning all crypto asset firms marketing to UK consumers and those supporting them to comply with the FCA for the upcoming financial promotion regime. 

The letter launched by the FCA is to issue a ‘final warning’ to all the crypto-asset firms, including many overseas firms that had not engaged with the FCA. In a recent survey held by the FCA regarding the new rules set by the regulator, only 24 out of 150+ firms had communicated back.

The FCA exclaimed they are “concerned by the poor engagement from many unregistered, overseas cryptoasset firms..”

A Look at the New Regime

This new regime is set to come into force from 8th October 2023 onwards. The new financial promotion regime is set to ban the ‘referral bonus’ scheme and make all crypto asset firms bound to introduce a ‘cooling-off’ period for first-time investors.  

The laws expressly prohibit unregistered crypto exchanges from sharing advertisements and promotions with UK consumers that are marketed to encourage consumers to invest in crypto assets. This prohibition already applies to conventional financial products. Communication is restricted to “purely factual information” and directions to current clients on how to “transfer, withdraw, or sell their existing assets.”

Also Read: FCA Chief Warns Against Hasty Crypto Regulation Amid Political Pressure!

וואָס if They Don’t Comply?

The letter expressly mentions that those crypto asset firms that are unregistered with FCA and do not comply with the new laws commencing from 8th October can communicate their financial promotions to UK consumers only when approved by an authorized person or when such promotions come within the narrow scope of exceptions in the Financial Promotion Order.  

The Letter also expressly mentions in bold that unregistered firms who continue financial promotions even without the above 2 conditions will be held criminally liable under section 21 of the Financial Services and Markets Act, 2000, and will be sentenced to 2 years of imprisonment, or an unlimited fine, or both. 

פעסט Action to be Taken Against Supporters 

Unregistered cryptoasset firms cannot continue to promote financial services without the help of their ‘supporters.’ Such support includes social media, search engines, app stores, and domain name registrars that help these firms continue towards targeted UK consumers and payment firms that allow consumers to invest.

The FCA expressly notifies that all such supporters must carefully go through and remember the legal obligations under – 

• Proceeds of Crime Act 2002, 
•  Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

failing to comply will result in a criminal offense. 

All in all…

The letter concludes with a serious note from the Directors, Lucy Cattledine and Matthew Long. It says, “If firms believe they are going to be in breach after the regime comes into force, they need to consider their position urgently.” It also warns businesses supporting the unregistered crypto asset firms by expecting them to take their responsibilities in protecting UK consumers seriously. 

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