“The government’s decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring peop
“The government’s decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions,” said Chancellor Rishi Sunak
The UK government has announced plans to strengthen the rules on cryptocurrency advertisements to protect consumers from misleading claims.
Under the plans, the Financial Conduct Authority (FCA) will have oversight of crypto adverts and they will be held to the same standard as other financial promotions such as stocks, shares, and insurance products, the Treasury said in a statement.
Around 2.3 million people in the UK are thought to own a cryptoasset, with their popularity rising.
However, research suggests that understanding of what crypto actually is is declining, posing a risk that these products could be mis-sold, the Treasury said.
“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims,” said Chancellor of the Exchequer Rishi Sunak.
“The government’s decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions.”
Who buys crypto based on an advert?
Laura Suter, head of personal finance at AJ Bell, said the government’s move will have a limited impact “as most people find out about cryptocurrency elsewhere and very few are encouraged to actually buy it from an advert”.
She noted that most people hear about crypto through social media.
“While the move will help some people, it won’t stop the outright scams that have exploded off the back of Bitcoin and other cryptos soaring in price. What would have a far bigger impact is cracking down on social media accounts where people claim to have made their millions from buying Bitcoin, most of which are ultimately scams or glorified pyramid schemes,” Suter said.
The Treasury said the FCA will shortly be consulting on their proposed financial promotions rules that will apply to cryptoassets.
The government intends to put in place a six-month transitional period from both the finalisation and publication of the proposed Financial Promotion Order regime and the complementary FCA rules.
The plans announced today complement broader proposals on cryptoassets and stablecoins set out via the government’s consultation on a regulatory framework for stablecoins last year, with next steps due to be announced in due course.
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