UK Treasury blocks ‘misleading’ crypto promotions

The UK Treasury has set out plans to change the law to strengthen consumer protections and bring advertising to the fast-growing cryptocurrency industry to the same standards as other types of financial products.

In statement on Tuesday, Rishi Sunak, prime minister of the United Kingdom, said crypto assets can provide people with new ways to trade and invest “but it is important that consumers are not sold products.” products with misleading claims”.

The proposals highlight a growing trend by regulators worldwide to tighten advertising standards as they grapple over how to regulate a rapidly growing global industry.

This week Spain imposed restrictions on the promotion of cryptocurrencies while the Italian regulator also warns about risk for consumers with little financial literacy.

The UK proposals come after the government began consulting the industry on crypto advertising in the summer of 2020. Since then, the prices of popular crypto assets such as Bitcoin and Ether have skyrocketed and hundreds of new digital tokens were launched. Last year, the UK’s market regulator estimated that 2.3 million people in the country own some crypto-asset.

The Treasury said it will provide cryptocurrency advertisements to the extent of applicable law including financial promotions, which states that “financial promotions must be fair, unambiguous and not misleading”.

To date, responsibility for cryptocurrency ads has largely rested with the Advertising Standards Authority. Adding FCA oversight represents a major tightening of the rules, as the ASA’s powers are often limited to investigating advertisements after the fact rather than requiring pre-approval. The FCA can also penalize companies that seriously violate its standards.

Last month, ASA reproachfully seven crypto pools for a range of promotions that include online campaigns and the use of social media influencers, saying that “something has to change rapidly in the air.” online space”.

Promotions for cryptocurrencies and services on public transport in London have attracted particular attention and call for a ban from a number of elected officials.

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