Crypto companies that fail to implement the core rules from October 8 could face an unlimited fine or up to two years imprisonment.
The United Kingdom Financial Conduct Authority (FCA) said it will extend the deadline for crypto firms to implement the strict marketing rules created to protect consumers.
According to an official release, the core rules will still come into effect from October 8, 2023, while measures that require greater technical development, like the 24-hour cooling-off period, can be implemented from January 8, 2024.
FCA Extends Deadline for New Crypto Rules
The FCA has labeled cryptocurrencies as high-risk investments and warned people to be prepared to lose all their money if they purchase such assets. The regulator has instructed that crypto marketing materials must be clear and labeled with risk warnings to protect UK investors.
An authorized firm must approve all public promotions, and they must not be misleading and inappropriately incentivizing people to invest. The rules apply to all global firms and are aimed at strengthening consumer protection from crypto asset risks.
Crypto companies that fail to implement the rules after the October 8 deadline and continue to promote digital assets to UK users will be punished with an unlimited fine or up to two years imprisonment.
Lucy Castledine, Director of Consumer Investments, said: “From this October, crypto firms must market to UK consumers clearly, fairly, and honestly. And they must provide risk warnings people understand. As a proportionate regulator, we’re giving firms that apply a little more time to get the other reforms requiring technology and business change right. We’ll maintain our close eye on firms during this extended implementation period.”
A Notable Transformation
Crypto firms are free to apply for the flexibility that would allow them to implement more technical measures like the 24-hour cooling period, client appropriateness testing, and categorization features by January 2024. The FCA has promised to take action against crypto companies illegally marketing to UK users from October 8.
Commenting on the latest development, Steve Rosenblum, CEO and co-founder of AI crypto risk management platform Libertify, said the era where crypto players operated primarily in their self-interest was coming to an end as the UK regulatory landscape is “rapidly shifting its focus” towards safeguarding the interests of retail investors.
In a statement sent to CryptoPotato, Rosenblum said the UK is undergoing a notable transformation where promoting any digital service or product without ensuring its suitability for customers would soon become a criminal offense.