UK govt cracks down on misleading cryptocurrency ads to protect consumers

business-standard.com:

The UK government on Tuesday joined a slew of nations in cracking down on misleading cryptocurrency ads to protect consumers.

The country has joined Spain, Singapore and India in an effort to reign in cryptocurrency advertisements that promise wild returns.

The UK Treasury published a consultation response, saying that proposed legislation will also provide the UK financial watchdog, the Financial Conduct Authority (FCA), powers to regulate the crypto market more effectively.

"Around 2.3 million people in the UK are now thought to own a crypto-asset with their popularity rising - but research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying. This poses a risk that these products could be mis-sold," the Treasury said in a statement.

The UK authority plans to bring crypto-assets within the scope of financial promotions legislation.

It means the "promotion of qualifying crypto-assets will be subject to FCA rules in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to," said the UK Exchequer.

"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," said Rishi Sunak, Chancellor of the Exchequer.

"We are ensuring consumers are protected, while also supporting innovation of the crypto-asset market".

The decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions.

Spain earlier Singapore