- The UK’s Financial Conduct Authority (FCA) has issued a warning to cryptocurrency businesses to adhere to new regulations governing financial promotions.
- The regulations apply to various communication channels, including apps and social media.
- Despite rumors that Bybit was considering exiting the UK market due to these regulations, CEO Ben Zhou has clarified that the company remains committed to compliance.
The Financial Conduct Authority (FCA) in the United Kingdom has issued a strong cautionary message to cryptocurrency businesses operating in the country. They’re being urged to strictly adhere to new regulations governing financial promotions, a requirement that a significant number of these businesses seem to be neglecting. In a public letter released by the FCA, it was revealed that out of more than 150 firms surveyed regarding these new rules, only 24 have responded thus far. These regulations, set to take effect next month, will impose strict limitations on how “unauthorized and unregistered cryptocurrency businesses” can communicate their financial promotions.
The FCA is notably concerned about the lack of engagement from many unregistered crypto asset firms, particularly those based overseas that have customers in the UK and will be affected by this significant change. Commencing on October 8th, cryptocurrency firms will be obligated to halt all illegal financial promotions targeting UK consumers, with potential penalties that could include up to two years of imprisonment, unlimited fines, or both.
As of now, the FCA has not provided any official comments in response to Decrypt’s request for further information.
These rules specifically forbid unauthorized cryptocurrency firms from promoting cryptocurrency asset investments to UK customers, mirroring similar restrictions applicable to other financial products. Communication is now limited to providing solely factual information and offering existing customers guidance on managing their current assets, including transferring, withdrawing, or selling them.
These regulations encompass various communication channels, including apps and social media. Additionally, a separate set of guidelines issued by the FCA back in July revealed that even cryptocurrency-related memes could potentially violate the agency’s promotion rules.
Recently, there were rumors circulating that the cryptocurrency exchange Bybit was contemplating exiting the UK market due to the challenges posed by these regulations. However, Bybit’s CEO, Ben Zhou, has clarified that the company remains committed to compliance, and no final decisions have been made regarding its future operations in the region.