Crypto firms face big penalties, including jail time, for unauthorized ads following the FTX disaster, UK financial regulator says
- The Financial Conduct Authority is warning crypto companies to follow its new guidelines on advertisements.
- Firms could face large penalties, including up to two years of jail time.
The Financial Conduct Authority said cryptocurrency companies will need to adhere to the UK regulator's forthcoming advertising laws or face the consequences.
Breaches of the new guidelines on financial promotions can lead to prison sentence of up to two years.
"All cryptoasset firms marketing to UK consumers, including firms based overseas, will soon need to comply with the new UK financial promotions regime," the FCA said in a statement Monday. "Firms must start preparing now for this regime. We will take robust action against firms breaching these requirements."
Although the new rules have not been finalized yet, company guidelines will mirror other firms who offer high-risk investments, including specific warnings and a "24-hour cooling off period" for customers to reconsider purchases.
The regulator's statement follows a slew of bankruptcy filings from crypto giants like Sam Bankman-Fried's FTX, the crypto exchange that lost at least $8 billion of customer funds last year.
"Cryptoassets remain high risk. We have repeatedly warned that consumers should be prepared to lose all of their money if they buy cryptoassets," the FCA said. "Recent events such as the high-profile failure of several cryptoasset firms further highlight the riskiness of these products."
The regulator added: "There is unlikely to be any compensation under the Financial Services Compensation Scheme for consumers who lose money."
In 2021, London's transport authority cracked down on ads for cryptocurrencies after the massive campaign to tout dogecoin spinoff floki inu around the city's travel system sparked concern.
- Astronomers find planet that seems too humongous to be orbiting its parent star!
- Penguins employ thousands of microsleeps to achieve 11 hours' slumber daily!
- Ashok Gehlot: Magician leaves centre stage in Rajasthan
- Trauma made Abrar an 'Animal': Bobby Deol on his negative role
- Victory of Modi's guarantees, say BJP leaders as party sweeps states states