While the UK is pretty crypto-friendly compared to the US, this does not mean you can flout existing rules. Yesterday, the Financial Conduct Authority (FCA) issued a statement warning digital asset firms to comply with rules. If certain unnamed firms do not improve, “we will act,” the regulator said.
The FCA said they have recently reviewed some crypto firms’ compliance, specifically regarding financial promotion and risk warnings. While recognizing that it may take some time to incorporate rules, they found some instances when “firms did not meet the required standards.”
The FCA explained:
“All firms communicating or approving financial promotions must make sure they have strong systems and controls for compliance in place.
If firms do not improve, we will act. We will also consider firms’ compliance with regulatory requirements, including the financial promotions regime, as part of any application to be authorised under the future financial services regulatory regime for cryptoassets.
We will continue to work with industry on this and other parts of the current an upcoming crypto regime.”
Nick Jones, Founder and CEO of Zumo, a digital-asset-as-a-service platform, said the announced by the FCA is encouraging as implementation has been inconsistent since compliance requirements started for crypto firms in October.
“Latest actions demonstrate that the FCA will be active in pursuing both custodial and non-custodial providers marketing to UK customers and engage directly to ensure remedial action. The question remains: is it enough to achieve the FCA’s policy objectives and are the largest industry players being held to account?”
While the FCA is warning scofflaws, they did state that they saw firms demonstrating good practice which they have shared in their good/bad practices section.