The UK's Financial Conduct Authority (FCA) has intensified its crackdown on crypto firms, issuing over 1,000 warnings and removing 48 apps from UK app stores since new financial promotion rules took effect last October, Coindesk reported. This enforcement highlights the regulator's commitment to safeguarding consumers in the rapidly evolving crypto market.
Aggressive Stance on Crypto Firms
Since the financial promotion rules for crypto companies came into effect on October 8 last year, the FCA has issued more than 1,000 warnings to firms that failed to comply. Lucy Castledine, the regulator's director of consumer investments, shared these insights in a recent interview with the media publication.
The FCA's actions have had a significant impact. The regulator's efforts have led to the removal of 48 apps from UK app stores. Castledine emphasized the FCA's ongoing commitment to monitoring and taking down illegal activities. “We will continue to act where we see firms acting illegally,” she said, underscoring the importance of these measures in protecting UK consumers from unregistered and potentially harmful crypto promotions.
The FCA isn't working alone in this endeavor. The regulator has partnered with third parties, including social media companies, to identify and remove illegal websites and content promoting unregistered crypto firms. This multi-faceted approach aims to control the spread of misleading information and ensure that only compliant firms can reach potential investors.
New Guidance for Registered Firms
On Wednesday, the FCA published new guidance for registered firms, highlighting examples of both good and poor practices in the industry. The rules mandate that firms take reasonable steps to verify whether a consumer is a restricted, high-net-worth, or certified sophisticated investor before making any financial promotions.
The report acknowledged that while most firms allowed customers to self-categorize correctly, there were instances of poor practice. Some firms guided consumers through the self-categorization process, telling them what information to enter to proceed. The FCA flagged these practices as concerning and reiterated the need for stricter adherence to the rules.
Last month, the FCA assessed crypto firms for compliance with new financial promotion rules, which sought to improve understanding of crypto investment risks. These regulations, effective in October 2023, followed consultative changes by the regulator.
The review focused on several key areas, encompassing the implementation of personalized risk warnings, the enforcement of a 24-hour cooling-off period, proper client categorization, and assessments.
This article was written by Jared Kirui at www.financemagnates.com.
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