The British government decides to introduce new regulations for cryptocurrency advertisements. According to the plan, the way virtual assets are looked at is to be brought closer to the way marketing of financial products and services, such as stocks or insurance, is treated. Consumer protection becomes the top priority.
New regulations, an answer to previous problems
Recently there has been a lot of talk about the wave of advertisements found in public spaces within the UK. They were most often seen as common means of communication and mainly presented Meme coins as a great investment opportunity. They have become a thorn in the side of British regulators, who want to impose new standards to minimize the investment risk associated with them.
As it turns out, advertisements for cryptocurrencies are to start coming under the Financial Conduct Authority (FCA), which will bring them “to the same high standard to which other financial promotions such as stocks, shares and insurance products are held.”
Treasury officials commenting on the matter indicate that they want the cryptocurrency market to flourish, but in such a way that the ads associated with it are fully honest, clear and not misleading. As they suggest, there have been times when past advertisements have not been subject to these rules, leaving consumers exposed to negative, yet hidden, persuasion.
Stepping up
Efforts to regulate the marketing of crypto companies have recently taken place in the UK. These have so far been led by the Advertising Standards Authority (ASA), which has banned many campaigns for irresponsibility. Many leading players in the market have come under criticism by the ASA for their narrative. However, these actions came after the fact.
The FCA’s regulatory oversight will change this rule and become the authority that authorizes companies that can advertise crypto assets as financial products. In turn, violations of the rules will be punishable by fines. As the Treasury communicates:
“The government’s decision to bring these types of advertising within the scope of regulation will mitigate the risk of consumer harm by ensuring that people have the right information to make informed investment decisions.”
A matter of urgency?
Marketing of crypto products is becoming increasingly common. Among other things, the ASA recently banned a high-profile Papa John’s campaign that offered free Bitcoins. The advertisement was deemed inappropriate and exploited people’s ignorance. In the face of such actions and declarations by officials, it can be assumed that the new regulations are a priority and that their entry into force is a matter of the near future.
