UK watchdog warns crypto firms to prepare for advertising rule change
LONDON (Reuters) -Britain's financial watchdog warned crypto businesses on Monday to get ready for a rule change on advertising later in the year, warning that any breaches by company officials could mean up to two years in prison.
Britain's finance ministry said last week it would set out secondary legislation this year to allow crypto firms which comply with the Financial Conduct Authority's anti-money laundering safeguards to issue their own promotions until new crypto regulation is introduced, probably sometime in 2024.
Currently the advertising must be approved by a firm which has full FCA authorisation.
The government also said it would reduce the implementation period for the change to four months from six months after the secondary legislation has been set out by parliament.
The FCA will also be given supervision and enforcement powers over AML-complying cryptoasset businesses promoting cryptoassets, such as forcing a company to take down its website.
"All cryptoasset firms marketing to UK consumers, including firms based overseas, will soon need to comply with the new UK financial promotions regime," the FCA said in a statement on Monday.
"Firms must start preparing now for this regime. We will take robust action against firms breaching these requirements."
The watchdog said cryptoassets remain high risk, and reiterated that consumers should be prepared to lose all of their money if they buy cryptoassets.
"There is unlikely to be any compensation under the Financial Services Compensation Scheme for consumers who lose money," it added.
(Reporting by Huw Jones; editing by Louise Heavens and Jason Neely)