The Financial Conduct Authority (FCA) wrote to firms marketing crypto-assets to UK customers to comply with the incoming financial promotions regime or risk criminal charges.
The FCA's order is effective from 8 October, and includes overseas firms that market their products to UK customers.
In a statement, FCA crypto financial promotions lead Jayson Probin said, "Failure to comply may result in firms committing a criminal offence... This is a critical change for the industry."
"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," FCA executive director Sheldon Mills added.
The FCA has outlined the requirements for promoting crypto-assets in the UK, with four legal methods:
- An authorized person communicates the promotion.
- An unauthorized person communicates the promotion, but an authorized person approves it.
- A crypto asset business registered with the FCA communicates the promotion.
- The promotion otherwise meets the conditions of an exemption in the Financial Promotion Order.
The FCA letter issued Tuesday stated: "Promotions that are not made using one of these routes will be in breach of section 21 of the Financial Services and Markets Act 2000 (FSMA), which is a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both."
Those seeking registration with the Financial Conduct Authority (FCA) must be prepared for a stringent application process, pay a registration fee, and wait for up to three months.
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