The Financial Conduct Authority or FCA has issued a final warning against the non-compliant cryptocurrency firms of UK. The agency claimed that it has yet to receive clarifications regarding the new regulatory requirements.
The warning has been directed towards the violation of the marketing and promotional rules that FCA recently amended. The agency noted that majority of the cryptocurrency firms are violating these regulations.
On this account, the agency has published a public letter addressed to virtual currency firms. The statement reads that only 24 out of more than 150 digital currency entities have responded to the regulators related to the new rules.
FCA officials have pointed out that the new advertisement regulations are set to go into effect by next month. It means that unregulated and unauthorized digital currency businesses must fall in line with the new financial promotional guidelines.
Regulators Ask Crypto Firms to Refrain from Illegal Financial Ad Campaigns
The regulators have claimed that they are concerned about the barrage of unregistered crypto companies where consumers from UK have registered. The document also asserted that these firms must refrain from making any illegal or unwarranted marketing attempts directed towards consumers in UK starting from October 8th.
The regulator revealed that any crypto entities that are found in violation these rules will be subjected to 2 years behind bars or a heavy financial fine or both.
In accordance with the guidelines extended by the agency, unregistered crypto enterprises have to refrain from advertising to consumers in UK. This rule is already applied to other types of financial firms that are present in the country.
At the same time, the firms have retained that the communication with the financial firms is going to be strictly limited to factual information. However, the firms are allowed to guide the current consumers regarding how to sell, transfer, or withdraw their current crypto holdings.
FCA Directs Companies to Comply with Existing Regulations
FCA introduced the prohibition of promotional content blockade to the cryptocurrency firms in July this year. However, the regulatory agency has not been able to implement the new regulations thus far.
The rules issued by the agency have added directions to the cryptocurrency firms about how the meme currency projects may violate the rules of their promotional rules. Bybit exchange is rumored to go out of UK on account of regulatory violations.
On this account, Bybit CEO Ben Zhou has informed that meeting the regulatory requirements is the first priority for the regulators. However, thus far there had been no formal draft regarding continuation of operations in UK for Bybit.
The tightening regulations from FCA are not directed towards digital currency agencies alone, they will also impact the social media applications, search engines, application stores, and digital payment companies. The agency is going to try any financial entity in violation of the rules with money laundering charges.
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