UK Financial Conduct Authority commited to intensify efforts against crypto market

The Financial Conduct Authority (FCA) of the United Kingdom has outlined its commitment to intensify efforts against crypto market abuse within the cryptocurrency sector over the next year.

Highlighted in its 2024 to 2025 strategic plans, the FCA aims to enhance its surveillance and enforcement capabilities to address market abuses and ensure the integrity of the crypto market.

To achieve these objectives, the FCA intends to bolster its monitoring and intervention frameworks. This effort includes the development of sophisticated analytics tools, such as network analysis and tools for visualizing transactions across different asset classes, to effectively identify and mitigate potential market abuses.

Moreover, the FCA plans to establish a balanced market abuse regime specifically tailored to cryptocurrencies and the Private intermittent Share and Capital Exchange Service (PISCES) facility.

This initiative is designed to regulate the market while simultaneously fostering innovation and reducing operational costs for the industry.

In addition to these measures, the FCA will also focus on supervising financial promotions by crypto firms, enhancing its technological capabilities to identify misleading or harmful promotional content.

UK Financial Conduct Authority commited to intensify efforts against crypto market

The regulator emphasizes the importance of protecting investors from potentially deceptive advertising practices.

To further safeguard investors, the FCA is committed to expanding its consumer awareness campaigns to educate the public about the risks of scams.

This educational effort comes in the wake of implementing new rules for crypto-related marketing in October 2023, followed by the release of compliance guidelines for UK-based crypto firms in November.

These guidelines aim to align crypto asset promotion regulations with those applicable to other high-risk investments.

Despite these regulatory advancements, challenges remain, as evidenced by numerous crypto firms continuing to breach advertising regulations.

In response, the FCA has issued 450 alerts concerning illegal crypto advertisements in 2023 alone and vows to persist in its enforcement actions against companies that violate these rules into 2024.

This regulatory approach by the FCA underscores its dedication to ensuring a safe crypto market environment, balancing the need for innovation with the imperative of investor protection.

New crypto asset marketing regulations have been unveiled by the FCA, and peer-to-peer lending stakeholders have spotted some striking similarities. Since the start of 2023, all P2P platforms and other high-risk investment firms have been required to follow these same guidelines, Beinsure Media says.

The foundations are much like these imposed on the peer-to-peer lending business and are designed to guard customers

The FCA has signalled that in response to industry readiness it will consider giving cryptoasset firms more time to implement certain changes, for instance a 24-hour cooling off period. Firms could be given until 8 January 2024 to introduce features that require greater technical development, with the core rules still coming into effect from 8 October 2023.  

According to FSA rules, crypto firms must first apply for the flexibility which would then allow them time to make the required back-office changes successfully. The rules and the approach to implementation are aligned with the approach taken last year when the FCA introduced rules for marketing other high-risk investments. 

Peter Sonner   by Peter Sonner