Cryptocurrency Crackdown: UK Government To Institute Legislation Revise On Financial Laws

The UK is instituting legislation to crack down on deceptive crypto-marketing practices, extending the regulations for financial advertisements to cryptocurrency.

Finance Minister Rishi Sunak intends “to bring the promotion of cryptoassets within the scope of financial promotions legislation,” according to proposals published Tuesday.

This measure will attempt to ensure that the marketing of cryptocurrency assets conforms with the rules of other financial promotions such as stocks and insurance products.

“Around 2.3 million people in the UK are now thought to own a cryptoasset with their popularity rising,” the UK Treasury said in the proposal. “But research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying. This poses a risk that these products could be mis-sold."

The Financial Conduct Authority has emphasized that crypto advertisements are not subject to regulation, stating that "if consumers invest in these types of product, they should be prepared to lose all their money.”

The UK initiated the foundation to regulate crypto ads in 2020. As a result, the Advertising Standards Authority (ASA) has interceded multiple times to prohibit faulty promotion, according to CoinDesk.

“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest,” Sunak said in a statement, as reported by CNBC. “But it’s important that consumers are not being sold products with misleading claims.”