UK Updates to the Regulation of Cryptoassets
On the 27th of March, HMT published the final outcome of its consultation with respect to firms marketing cryptoasset to UK consumers. The Treasury confirmed that the marketing of cryptoassets must now follow the UK’s Financial Promotion Regime. Under the new rules, there will be four routes available to market such investments:
When communicated by an authorised person,
When approved by an authorised person,
Temporarily when communicated by a firm registered under the Money Laundering Regulations with the FCA, or
The promotion complies with another exemption found within the Financial Promotion Order.
Recent events in the cryptoasset space (such as the collapse of FTX), have led to the Government taking an accelerated approach to regulation, including the reduction of the implementation period from 6 months to 4 months. The sector has been the focus of much scrutiny recently, with the crypto markets remaining highly volatile and a lack of proper consumer risk disclosure. Bringing cryptoassets within the remit of the UK’s financial promotions regime should afford greater protections to retail customers, with the FCA responsible for oversight of such communications.
