As was previously covered, the UK Financial Conduct Authority (FCA) has proposed new marketing rules for crypto offerings. The rules aim to largely align with current financial product requirements while also incorporating a “cooling off period.” In brief, digital asset investors must acknowledge they can lose all of their money in a crypto offering.
Earlier today, CI received a comment from the co-founder of Zumo – a UK crypto-as-a-service provider.
Paul Roach, Chief Product Officer of Zumo, shared:
“Getting the right regulatory framework in place is a priority for the digital assets sector, but we really need the FCA to work more closely with other government bodies so that everyone is singing from the same hymn sheet. On the one hand you have a positive consultation by HM Treasury and a report by the UK’s Crypto and Digital Assets APPG that recognises the growth and potential of the sector, and on the other hand you have this language from the FCA, which serves to sow fear and make it seem that everyone will lose their money.”
“With crypto set to be included in the scope of the UK’s regulated financial activities through the Financial Services and Markets Bill, let’s actually treat it like a financial service and not a gambling activity. The government and regulators must work much more in tandem to get this crucial regulation right, and – above all – avoid resorting to regulation by enforcement and driving the industry offshore.”
While there may be some adjustments, expectations are for the more stringent marketing requirements to go into place.
At the same time, the UK has embraced a policy of becoming a Crypto Hub that requires bright-line rules that protect investors and raises the bar on platforms.