According to a release from the FCA, 146 alerts were issued on the first day of enforcing the new crypto asset marketing rules. The new set of stringent regulations launched on 8 October, and aims to make the crypto market more transparent and accountable. 

The rule is applicable to all firms marketing crypto assets to UK consumers, regardless of their location. Following the establishment of the new marketing rule, there are four routes the firms can take to lawfully communicate crypto asset promotions: 

• Crypto assets can be promoted by an authorised person. 
• Promotions can be approved by an authorised person. 
• A firm registered under the Money Laundering Regulations can communicate the promotion. 
• The promotion adheres to the conditions of an exemption in the Financial Promotion Order.

Firms also need to abide by new measures which include clear and fair risk warnings to investors. There will also be a crackdown on inappropriate incentives to invest, such as “refer a friend” bonuses.

According to the FCA, not all firms of concern have been added to the ‘regulatory radar’ yet, and urges consumers to check the warning list of unauthorised firms before making investments in crypto. 

The FCA had been warning firms to prepare for the new regulations since February this year, and even offered the option to apply for additional time to enact certain changes.

Non-compliance with the regulations is now considered a criminal offence, and is punishable by an “unlimited fine,” or up to two years in prison. 

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While the FCA’s stance is that these new regulations underscore the UK’s determination to foster a secure and transparent crypto market, some industry leaders say it’s not enough. 

According to CEO of the crypto exchange Bittrex Global Oliver Linch, regulations like the marketing rule are “piecemeal bits of legislation” that will likely result in absurdities. “In this instance, the financial promotion rules come into effect, but there are no substantive regulatory rules yet,” he said, in an interview with DIGIT. 

“At the moment, there’s a lot of things cutting in a lot of directions in the UK,” he said. “You need to have a guiding mind to actually coordinate these various efforts.”