The Financial Conduct Authority (FCA), the United Kingdom's financial markets regulator, has once again raised worry about the lack of engagement by crypto firms that will soon be subject to new marketing laws. The repercussions of noncompliance could be severe, it warned.

The FCA issued a final warning to firms marketing crypto assets to U.K. consumers in a letter dated Sept. 21. The four-page letter first documented the efforts the agency had made to reach out to crypto firms and attempted to support them as they complied with rules announced on June 8.

The FCA has gone so far as to push back the Oct. 8 compliance date to Jan. 8, 2024, in order "to introduce features that require greater technical development" and to publish long best practices notes.

However, "despite our best efforts," "many unregistered, overseas crypto asset firms [...] have refused to engage with the FCA." As evidence, the letter stated that just 24 of these companies answered to a survey issued to 150 of them.

Compliance with the new regime will require companies to be proactive:

“Once the regime is in force, unauthorized and unregistered crypto businesses will only be able to communicate financial promotions which have been approved by an authorized person or are within the scope of certain narrow exemptions in the Financial Promotion Order.”

Illegal advertising of crypto assets would be become a crime. Violators would be put on a watch list, and their promotions might be prohibited or removed from websites, social media platforms, and applications. These intermediaries would also be expected to follow the new system, in accordance with anti-money laundering and counter-terrorism financing legislation, among other things.

The FCA may seek monetary compensation from the violators, and any transactions they engage into with UK nationals will be unenforceable, according to the letter. Crypto asset types that cannot fulfill the new rules are expected to take efforts to prevent UK consumers from responding to their advertisements.

Sources:

https://cointelegraph.com/news/uk-fca-unregistered-crypto-firms-final-warning-ads-regime-compliance

https://www.fca.org.uk/publications/good-poor-practice/firms-preparations-cryptoasset-financial-promotions-regime