New regulations went live on Sunday regarding how providers of cryptoassets could market to potential customers in the United Kingdom. The U.K. Financial Conduct Authority (FCA) warned that such changes were coming earlier this year, and a number of top crypto firms had already started altering their U.K.-facing businesses to comply.
Under the rules from the FCA, companies that want to promote cryptoassets in the U.K. must be authorized or registered by the FCA or have their marketing tactics approved by an authorized firm. The promotions must also be “clear, fair and not misleading, labeled with prominent risk warnings and must not inappropriately incentivize people to invest,” according to an announcement on the FCA website.
Some cryptoasset firms opted to either halt or pause service in the U.K. as the new rules were issued. Payments giant PayPal announced in August that it would pause crypto transactions in the U.K. until early 2024 to have more time to become compliant with the rules. Bybit, a crypto exchange that isn’t registered with the FCA, initially said it would explore options to stay in the region before changing course to announce it would suspend operations in the U.K. in October.
Other firms opted to comply with the new rules straight out of the gate. Binance, the largest crypto exchange in the world by trading volume, launched a new U.K. domain and partnered with FCA-approved advisor Rebuildingsociety.com, who will ensure Binance’s marketing meets regulations. Crypto exchange OKX developed a new user experience for U.K. users, which included reducing the number of tokens offered and placing clear risk warnings on its promotions.
In a final warning published September 21, the FCA said violations of its marketing rules could lead to an unlimited fine and a two-year imprisonment. However, the FCA did announce this week that firms could apply for a three-month extension to have more time to make the necessary changes, which take operational time to execute.