Firms marketing cryptoassets to British investors will be required to introduce a 24-hour “cooling-off period” for first-time buyers, under new advertising rules announced by the Financial Conduct Authority.
The UK regulator announced new rules to regulate crypto asset marketing Thursday morning, which will come into effect from October 8, 2023. Under the new rules, first-time investors will be subject to a 24-hour delay between requesting to purchase cryptocurrency and completing the purchase.
During that period, they will be unable to receive direct offers of a financial promotion until confirming they wish to proceed with the purchase after 24 hours.
In a press release accompanying the announcement, FCA executive director Sheldon Mills noted that people have freedom to buy crypto but should be protected from “making a hasty decision.”
Our new rules mean #crypto firms must ensure that people have the appropriate knowledge and experience to #invest.
Firms that promote #cryptoassets will need to include clear risk warnings and ensure adverts are clear, fair and not misleading. https://t.co/lzThyUU1Y1
— Financial Conduct Authority (@TheFCA) June 8, 2023
Under the new order, marketing schemes such as “refer a friend” will be banned. Crypto firms will need to ensure that people have the appropriate knowledge and experience to invest in crypto, usually implemented via a preliminary test for new investors.
Firms promoting crypto assets would also be required to place appropriate risk warnings and ensure adverts are “clear, fair and not misleading.” Mills added, “Our rules give people the time and the right risk warnings to make an informed choice.”
Growing interest among U.K. investors in crypto assets prompted the new rulemaking, according to the FCA. The government agency estimates that the number of Britons holding crypto doubled between 2021 and 2022.
The FCA and crypto
The FCA has repeatedly voiced the opinion that it considers crypto assets “high risk,” and that investors should be prepared to lose all of their money.
Earlier this year it issued a statement that firms must follow one of four mandated routes for promoting cryptocurrencies or face criminal punishment, including “up to two years imprisonment.”
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Source: https://decrypt.co/143810/new-uk-crypto-investors-face-cooling-off-period-under-fca-rules
