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UK to Curb Crypto Advertising – What Should We Expect?

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UK to Curb Crypto Advertising - What Should We Expect?

Introduction

The wild nature of the crypto industry and the frequency of investors losing their assets to scammers and cyber criminals have attracted the attention of regulators world over.

The UK government has recently taken bold steps to tighten crypto regulations in the region, by banning the display of crypto ads without proper disclosure of the risks involved in such investments.

This move has been designed to help investors understand the risks they are exposed to, when they choose to invest in cryptocurrency. In this article, we shall examine the impact of this new rule and how it is likely to impact the Crypto industry.

UK government plans to Curb Crypto Advertising

In an effort to protect investors from the risks associated with volatile digital assets, the UK government has announced plans to curb Crypto advertising without proper risk disclosure.

The new rules, which are expected to take effect in October, will require all crypto ads to include a prominent risk warning and a 24-hour cooling-off period for consumers.

The UK government believes the new rules are necessary to “ensure that consumers are fully aware of the risks involved before they invest in crypto assets.

Cryptocurrencies as we know are highly volatile assets and their prices can fluctuate wildly within a short period. In the past year, the price of Bitcoin has fallen by more than 76% in less than three months while several other Cryptocurrencies have lost over 90% of their values in less than one month.

Hence, the UK government is concerned that the high risks associated with cryptocurrency investment are not being adequately communicated to consumers.

The new rules will apply to all crypto ads, including those that appear on TV, radio, billboards, and social media.

All Crypto firms will now be required to obtain authorization from the Financial Conduct Authority (FCA) before they can advertise their services in the UK.

Further, the UK regulatory body known as the Financial Conduct Authority (FCA) disclosed that all crypto referral schemes that involved referring new investors to buy crypto to win bonuses from an exchange would therefore be wiped out entirely and all those promoting such investments would ensure that they disclose fully to investors the risks involved in such investment and the possibility of losing all their investments from a single investment.

Afterwards, it will be left for the investor to decide whether to continue with such investments or to abandon them and move to buy shares from UK which is considered an alternative investment.

More so, with the new rule, all crypto firms will have to provide an open warning to investors such as: Ensure you understand the risk involved before investing. Crypto investments is a high-risk investment and you should not hope to be protected if anything goes wrong. Do not invest if you are not ready to lose your investments and so on.

While this new rule tends to favor investors and help them avoid the risks involved in crypto investments, many crypto exchanges on the reverse find it very limiting and potentially discouraging clients from investing with their exchange.

What Can We Expect from this new rule?

Here are some of the things we can expect from the new rules on crypto ads in the UK:

  • A decrease in the number of crypto ads.
  • More prominent risk warnings in crypto ads.
  • A 24-hour cooling-off period for consumers before they invest in crypto assets.
  • Increased scrutiny of crypto firms by the FCA.
  • Increased market stability and industry consolidation.
  • Decrease in the volume of investment from investors.

Conclusion

While the new rules could be considered a positive step towards consumer protection. However, it is important to note that they will not possibly eliminate all of the risks associated with investing in cryptocurrencies. Hence, investors should always do their research before choosing to buy Cardano (ADA) or any other cryptocurrency of their choice.

SEE ALSO: How Coders Are Boosting Thailand’s Visitor Experience

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