- The UK’s FCA is tackling misleading crypto advertising.
- Ahead of these new laws, UK citizens have substantially increased their crypto ownership.
- Clear and controlled advertising may be the path to sustainable crypto adoption.
The UK has positioned itself as a welcoming crypto hub ahead of the roll-out of its new crypto legislative framework clamping down on advertising and mis-selling, set for Oct.8. This position by the UK government has paid off as crypto ownership is skyrocketing.
According to the Financial Conduct Authority (FCA), the body charged with creating the crypto framework, crypto ownership more than doubled in the UK last year.
20% of the UK Now Owns Crypto
In 2022, only 10 percent of people surveyed by the FCA admitted to owning crypto. However, a year later and during a period of positivity in the UK, that figure has jumped to 20%. This impressive increase in crypto adoption comes despite global regulators’ warnings following the high-profile collapses of FTX, Terra, and 3AC – to name a few.
“It is up to people to decide whether they buy crypto . . . Our rules give people the time and the right risk warnings to make an informed choice,” said Sheldon Mills, the FCA’s head of consumers and competition.
He added that its crackdown on crypto group advertising would begin on October 8.
Crypto Gets Mainstream as Regulations Are Laid
On top of the 20% ownership figure in the UK, the FCA also found some 36% of 2,000 adults polled by the FCA said they had seen or heard crypto adverts. In comparison, 25% of those who had not previously been involved in crypto became “curious” due to exposure to advertising campaigns.
This highlights the importance of crypto advertising in raising awareness and increasing adoption. However, this advertising needs to be regulated for the FCA to dispel the “Wild West” association in crypto.
A Major Regime Change
The FTX dram has helped push global regulations into high gear. While the U.S. is still slow to get off the mark, the EU – with MiCA – and now the UK is implementing substantial crypto regulations regime changes.
As part of this, the FCA will kick off its crypto marketing regime on October 8. It will require companies to use risk warnings and offer a “24-hour cooling-off period” for customers. Incentives for customers to “refer a friend” will also be banned.
The regime will apply to all crypto asset businesses marketing to UK customers, regardless of whether they are based in the UK or overseas.
On the Flipside
- The FCA currently regulates crypto firms for money-laundering compliance only.
Why This Matters
Because of the FTX-induced chaos in the cryptosphere, regulators have realized the need to step up. The fact that the UK is seeing increased adoption at a time when the markets are down, but regulation is up points to a desire for regulation.
Read more about EU’s MiCA:
Read more about the financial loss suffered by CZ and Armstrong: