The UK Treasury Department has offered the FCA to take over the advertising of cryptocurrency projects to rule out “misleading” promotions.
The country’s Treasury Department has offered the UK Financial Conduct Authority (FCA) to take over control of cryptocurrency companies that are allowed to advertise their services. The UK government wants to get rid of “misleading and inappropriate promotions” in the cryptocurrency industry. The government first noted this issue in a July 2018 report :
“Ads often exaggerate the benefits and rarely warn of the risks of volatility – that consumers can either increase their investments or lose them. They also do not warn about the lack of industry regulation. “
Since the publication of the report, the UK government has recorded an increase in the number of people using cryptocurrencies. The number of cryptocurrency investors increased by 2.35% – from 1.5 million to 2.6 million people. At the same time, FCA announced that it was interacting with the government of the country and the Bank of England to protect users from the risks associated with the cryptocurrency industry, while not interfering with the development of technology.
Thus, in order to ensure that cryptocurrency companies do not cheat investors, the Treasury Department is proposing that the FCA take over control of the “regulatory gateway” through which companies wishing to advertise their products must go.
The government is most concerned about the availability of convertible assets that can be exchanged on spot exchanges. Cryptocurrency companies that advertise investment services, exchanges and giveaways must obtain FCA approval, while collectible tokens and cryptoassets that circulate in closed systems can be advertised without regulatory approval.
Before adopting the relevant regulation, the Ministry of Finance submitted its proposal for public comment. Interested parties can submit their proposals by October 26. Recall that recently the UK Financial Conduct Authority demanded that all firms working with cryptocurrencies in the country apply for registration with the regulator.