According to a report unveiled on July 20, the UK government is proposing that the Financial Conduct Authority (FCA) should begin overseeing the advertisement of cryptocurrency assets. The report notes that the government considers this move as an option to formulating a new structure for the product and it aims at enhancing investor protection.
FCA to regulate crypto promotions
John Glen, the Treasury economic secretary, and City minister indicated that even companies selling regulated investments that have an element of cryptocurrency should seek FCA approval depending on their operation. The move to grant the regulator authority to oversee advertising of certain crypto assets aims at ending false promotion of cryptocurrency investments.
Glen noted that if the crypto ads by unauthorized firms are deceptive or don’t fully explain the risks associated then that means people can easily lose their money. He added that the government wants to enhance the protection of investors on issues concerning financial promotion which include crypto assets promotion. At the same, the government wants to ensure that investors have access to a variety of legitimate products in the market.
The city minister indicated that the current regulation that requires unauthorized companies to have the approval of their promotions by regulated firms before they advertise a specific product has failed. This is because of the growing number of crypto products that are emerging in the market. As a result, Glen suggested that even those regulated firms should now seek FCA approval before promoting any crypto assets.
Crypto scammers target Britons who want to get rich quickly
The announcement comes following an SEC survey report that established that most Britons buying cryptocurrencies are often looking for ways of getting rich quickly. According to the respondents interviewed most saw cryptocurrency as a shortcut to riches.
According to the FCA, there is a proliferation of crypto scammers in the country that are using social networks to promote crypto scams targeting gullible citizens. The scammers mostly leverage celebrity endorsement and images of lavish cars to lure their victims. The FCA is considering banning the sale of crypto derivatives such as options, CFDs, and futures.