Crypto firms could face 2 years in jail for breaching regulations.
FCA’s new financial promotions proposal suggests that crypto firms could face harsh punishments for breaching the laws
The U.K Financial Conduct Authority (FCA) revealed in a statement that executives of crypto firms could face up to two years of prison if they fail to meet requirements set for them. The proposed “financial promotions regime” hasn’t yet been approved by parliament, but could mean all crypto firms have to follow certain advertising requirements if they want to market their crypto services to U.K. customers.
That means that these regulations wouldn’t just affect U.K.-based firms, but any firms that are overseas that want to market to U.K. consumers. For instance, crypto firms would need to be authorised under FCA to advertise in the U.K or have some form of exemption.
FCA released the four routes that crypto firms will be able to promote their services in the U.K. These are:
- The promotion or advertisement is being conducted by someone who is authorized by the FCA.
- The FCA themselves or an authorized person has approved the promotion. A regulatory gateway will be introduced to get their promotions approved in the future.
- Under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations of 2017, the promotion is distributed by a crypto asset company registered with the FCA.
- The promotion conforms with the requirements of the Financial Promotion Orders.
If a crypto firm is found to be promoting outside of these rules and laws, they will be charged under the Financial Services and Markets Act 2000, breaching such an act can mean up to 2 years in prison. The FCA will be taking these regulations extremely seriously. Lawbreakers could face various penalties including having the company’s website taken down and facing public warnings.
The push for regulations on crypto companies has been long-awaited, with many adverts for such products and services being misleading. For example, they may make somebody believe they will make quick money. These new censorships will prevent a lot of these deceptive adverts from ever reaching consumers, thus preventing any money loss.
With crypto and digital assets becoming ever more prevalent, it’s integral to keep up to date with all the changes in laws and regulations. That’s exactly where Cryptolytx’s critical thinking platform will help companies navigate their way through various changes and trends that will inevitably keep impending.