Advertising regulations are similar, but different by country. Then if you mix in that there are different regulations by industry or vertical. Then there are relatively new industries that are picked up by existing regulators. That is what we are talking about here today: Cryptocurrencies and blockchain assets.

What has changed?

That "Warning"s are now over and action is being taken!

Building on previous updates, notices and existing legislation; on October 8, 2023, the Financial Conduct Authority (FCA) introduced new rules governing the marketing of crypto assets in the UK. The rules are designed to protect consumers from misleading and unfair promotions and bring stricter legal sanctions. 

In the first 24 hours of the new regime, the FCA issued 146 alerts to firms that were not complying with the rules.

The most common issues included:

• Failing to include risk warnings
• Making misleading or exaggerated claims
• Targeting vulnerable consumers
• Promoting unregulated products and services
  

The FCA has warned consumers to be wary of any crypto marketing promotion that does not include clear risk warnings or that makes promises of guaranteed returns. Consumers should also check the FCA's Warning List before investing in any crypto asset to make sure that the firm they are dealing with is authorised.

The FCA's new crypto marketing rules are a welcome step forward in protecting consumers from scams and other risks in our opinion. However, it is important to note that crypto assets remain a high-risk investment, and consumers should only invest what they can afford to lose.

What does this mean for those who promote financial services and crypto products?

• Non-compliance and not working in good faith with any investigation, can and may be considered a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both. 
• If you are UK based, or even promoting to UK customers this applies to you! Warnings have been given, action is now being taken.
• You have a short period of time to get your marketing practices and monitoring in place, they say, “Where firms are engaging with the FCA in good faith with a view toward achieving compliance we are taking a proportionate approach to implementation.”
• That you need to know the advertising rules alongside financial services marketing and the perception of crypto being the “Wild-West” is definitely over!
• And, interesting if you are an intermediary or a supplier and you facilitate this, you may also be also liable. If you are running influencer marketing, paid-social or affiliate programmes - do you know where your agents are, and what they are actually saying about your brand?

Our hot take

In the FCA’s own words: “In the case of non-compliance, we will take robust action to remove illegal content to protect consumers.” Coming out of the blocks fast and effectively putting 146 organisations on final notice is a strong move.

Other industries have seen the need for pre-approval of all marketing and comms from a regulator. This alongside legal action and fines have shown to restrict and seriously limit others in the past from their potential let us alone brand, and reputational damage.

Unlimited fines and imprisonment are real world outcomes now for not planning and executing legally compliant promotions. 

How can RippleXn help?

Monitoring your own marketing, your clients marketing or being able to audit a client’s position is essential to ensure all the rules are being followed or be able to show they are being checked and improved. Talk to the RippleXn team for a demo and help you setup your first campaign. Ask about advertising compliance, and contractual statement checking.

Talk to us to get started

References:

• FCA’s final warning letter that was sent out:
  https://www.fca.org.uk/publication/correspondence/final-warning-cryptoasset-firms-marketing-consumers.pdf 
• FCA Issues 146 Alerts on First Day of Crypto Marketing Rules: https://www.fca.org.uk/news/statements/fca-issues-146-alerts-first-24-hours-new-crypto-marketing-regime 
• Common Issues in Crypto Marketing: https://www.fca.org.uk/news/statements/common-issues-crypto-marketing 
• Warning List of Unauthorized Firms: https://www.fca.org.uk/consumers/warning-list-unauthorised-firms
• The continually updated list of Warnings issues: https://www.fca.org.uk/news/search-results?category=warnings&start=1