“Like other high risk investments, consumers will be given a cooling off period to decide whether they want to invest their money.”
These regulations will apply to all firms marketing cryptoassets to UK consumers, regardless of whether the firm – or perhaps even celebrity influencer - is based overseas or what technology is used to make the promotion.
The FCA is working with international counterparts to spread the word and help enforce compliance as it recognises many adverts may stem from abroad.
“We will take robust action where we see firms promoting cryptoassets to UK consumers in breach of these rules,” she said.
“Sanctions will range from taking down websites, to issuing public warnings, to enforcement action.”
She added: “We know that advertising is powerful. And never has it been so important to test the validity of those claims as during a cost of living crisis, when consumers may be increasingly desperate to make money quickly and take excessive risk, sometimes falling prey to scams.”
Elsewhere, she said the number of reports to the FCA of cryptoasset scams have progressively increased over the years.
In 2019 there were 1,619 reports compared to 6,372 in 2021.
“We at the FCA have a substantial role to play in preventing harm to consumers from financial crime,” she said.
“None of the cryptoasset firms registered with us have been approved to offer crypto ATM services. Last year we warned operators of crypto ATMs in the UK to shut their machines down or face enforcement action.”
When they failed to do so, the FCA conducted joint raids with the West Yorkshire Police and soon after the Met Police.
Pritchard said through the FCA’s ScamSmart and InvestSmart campaigns, it warned consumers of the risks and had an online portal where they can report scams and check the warnings list.
The FCA had some success with getting Google and Bing to stop promotions of firms on their platforms that are not authorised by the regulator.
“We hope others tech giants follow. We will continue this focus and hope other tech giants will follow.”
sonia.rach@ft.com
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