Those marketing crypto to UK consumers will need to introduce a cooling-off period for first time investors from 8 October 2023, under new advertising rules announced by the FCA.

As part of a package of measures designed to ensure those who buy crypto understand the risk, ‘refer a friend’ bonuses will also be banned.

The new rules are to ensure that crypto firms provide people with the appropriate knowledge and experience needed to invest responsibly in it.

Those promoting crypto must also put in place clear risk warnings and ensure adverts are clear, fair, and not misleading.

Following government legislation, the FCA’s new rules aim to bring crypto promotions under the regulator’s remit.

Sheldon Mills, executive director, consumers and competition said: “It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.

“Consumers should still be aware that crypto remains largely unregulated and high risk. Those who invest should be prepared to lose all their money.

“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”

Research from the FCA shows that the estimated crypto ownership has more than doubled from 2021 to 2022, with 10% of the 2,000 people surveyed stating that they own crypto, prompting the regulator to introduce the limitations on marketing.

The FCA assures that their approach to the promotion of crypto is consistent with the rules introduced by them last year to tackle misleading financial advertisements of high-risk investments.

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Further, it supports their three core commitments laid out in the 2023/24 business plan to reduce and prevent serious harm, set and test higher standards and promote competition and positive change.

However, the FCA is not stopping there: it is also consulting on additional guidance setting out expectations of firms advertising crypto to UK consumers. Those wishing to have their say have until 10 August to respond.

Recently, the Treasury Committee has said that unregulated crypto should be held under the same regulatory framework as gambling rather than a financial service. If this taken up by government, then marketing regulations may become more stringent.