Advertising Crypto in the UK Could Lead to Jail

Yes, you read that right. According to newly proposed advertising laws from the United Kingdom Financial Conduct Authority (FCA), executives of crypto firms in the region could face up to two years of jail if they fail to meet specific requirements around advertising crypto.

What is the FCA and what did it propose?

The UK FCA is a financial regulatory body that operates independently of the Government. The agency is tasked with regulating financial firms that provide services to consumers and maintaining financial market integrity.

In a statement released on 6 February, 2023, the FCA announced that cryptocurrency firms marketing to consumers in the UK must prepare for the "financial promotions regime". This includes firms based overseas.

If consented to by the Parliament, under the FCA's proposed "promotions regime", crypto firms must either have permission from the agency to advertise their services or a bespoke exemption under the Financial Promotion Order.

If and when this "regime" comes into being, there will be only four courses for advertising crypto asset services in the UK:

1. The promotion is communicated by FCA-authorised personnel.

2. The promotion is made by unauthorised personnel but approved by the FCA. At the moment, legislation is making its way through the Parliament which, if approved, would bring into being a regulatory gateway that authorised firms will need to pass through to approve financial promotions for unauthorised personnel.

3. The promotion is conveyed by a crypto firm registered with the FCA under the 2017 regulations known as MLRs (Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer)).

4. The promotion abides by the conditions of a bespoke exemption in the Financial Promotion Order.

The FCA further said promotions not following one of those routes would be a breach of FSMA (Financial Services and Markets Act 2000) section 21, "which is a criminal offence punishable by up to two years imprisonment".

Along with jail time for crypto firm executives, illegally advertising crypto in the UK could lead to public warnings, websites being taken down, and further enforcement actions.

Prepare now

Indeed. It is worth noting that the implementation period for this regime is four months from the date of approval by the Parliament.