U.K. strengthens consumer protection laws for Bitcoin and crypto ads 🚨 This article is 4 years old...
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U.K. strengthens consumer protection laws for Bitcoin and crypto ads
2 min read
Updated: Jul. 22, 2020 at 10:44 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Cryptocurrency firms advertising to U.K. citizens will be governed by legal regulations for marketing their products, as per Her’s Majesty Treasury announcement Monday.
Crypto ads to be scrutinized
The HM Treasury is weighing a proposal for “better” consumer protection for users of cryptocurrencies and similar products.
Documents obtained by CryptoSlate show city minister John Glen has published a proposal to “strengthen protections around the promotion of financial products and cryptoassets.” Glen is a management consultant-turned-politician who has been a British Member of Parliament (MP) since the 2010 general election.
This is not a crypto ad ban. Instead, the politician calls for more protections for the promotion of cryptoassets while “continuing to ensure people have access to a wide range of products on the market.”
“It’s important that people can understand the financial products they see promoted. If adverts by unauthorized firms are misleading or don’t fully outline the risks, then people can end up losing money,” said Glen.
In the proposal, the country’s Financial Conduct Authority (FCA) is earmarked to oversee all crypto-related advertisements:
“Today’s proposals would mean that authorized firms would have to obtain specific FCA consent to approve the financial promotions of unauthorized firms.”
No misleading ads
Glen points out the variety and “vast quantity” of products being offered on the market as one of the reasons behind the increased scrutiny. FCA oversight, in this regard, helps can ensure such promotions are “clear, fair, and not misleading.”
“The fact they are often targeted towards retail investors underscores the importance of promotions being candid about the risks involved,” Glen added.
The proposal said crypto-companies will be regulated in the manner as popular fintech and financial service applications like eToro and Revolut:
“This would mean that their promotion would be held to the samehigh standards for fairness, clarity, and accuracy that apply to traditional financial services promotions.”
The development comes almost two years after U.K. authorities noted crypto ads overstate their benefits and “rarely warn of volatility risks, the fact consumers can both grow and lose their investment, and the lack of regulation.”
Subsequent surveys confirmed the above; 35 percent of British citizens had, indeed, been swayed by crypto advertisements to purchase tokens. Meanwhile, the number of countrymen using cryptocurrencies saw an increase as well — from 1.5 million people to 2.6 million people.
(Two relevant consultations here and here are currently ongoing and active.)
