UK to crackdown on misleading crypto ads as bitcoin slump continues - YAHOO FINANCE
Bitcoin continued its recent slump on Tuesday, down more than 2% on the day to $41,912 (£30,786) as the UK government looks to toughen up rules on misleading cryptocurrency adverts.
The Treasury department, following in the footsteps of Spain and Singapore, said ads will be brought into line with other financial advertising to ensure they are both fair and clear.
This means the promotion of qualifying cryptoassets will be subject to Financial Conduct Authority (FCA) rules, in line with the same standards that other financial promotions such as stocks, shares, and insurance products are held to.
Under the Financial Services and Markets Act 2000, a business cannot promote a financial product unless they are authorised by the FCA or the Prudential Regulation Authority (PRA), or the content of the promotion is approved by a firm which is.
Firms that wish to promote such investments and activities must comply with binding rules that financial promotions must be fair, clear, and not misleading.
The new rules aim to increase consumer protection while encouraging innovation.
It comes as around 2.3 million people in the UK are believed to own a cryptoasset as their popularity continues to rise.
However, research suggests there is still a lack of understanding of what crypto actually is, suggesting that some users may not fully understand what they are buying.
“This poses a risk that these products could be mis-sold,” HM Treasury said.
Chancellor Rishi Sunak said: “Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims.
“We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.”
It comes after the government launched its Cryptoasset Taskforce in 2018, which continues to steer the UK’s regulatory response to the market. Meanwhile, the Advertising Standards Agency has already been banning individual crypto adverts that it deems misleading or understating the risk involved in the market.