The UK government has announced that it wants to get rid of the „misleading and inappropriate promotions“ that we currently see in the crypto coin industry. This would imply that the country might be about to regulate Bitcoin ads.
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Regulated advertising in the UK?
Yesterday, a class action lawsuit was announced in Australia against Google, Facebook and Twitter for banning crypto currency advertising on their platform. And now a proposal has been published for the UK’s financial regulator to regulate crypto advertising.
Yes, this plan involves the Financial Conduct Authority (FCA), which, if approved, would be responsible for monitoring advertisements broadcast by unauthorized companies, including those related to crypto currencies such as Bitcoin.
But this plan should not come as a surprise. In 2018, the government had already exposed the problem by pointing out that „advertisements often exaggerate the benefits and rarely warn about the risks of volatility.
As a result, John Glen, the UK’s finance secretary, said they wanted to „put more safeguards around such financial promotions, including the promotion of cryptoactives“ such as Bitcoin.
However, Glen said they want to do so in a way that will continue to ensure access to a wide range of market products.
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What would be the regulations?
In order to ensure that crypto companies do not mislead potential investors, the plan proposes that the FCA take control of a „regulatory gateway“.
This means that the FCA will impose a control through which companies seeking to advertise their products must pass.
As a result, those companies that do not have approval will not be able to advertise their services or Bitcoin in the country.
In this sense, they must have the specific consent of the FCA to approve financial promotions. In the event that a company promotes its products, the FCA will force it to remove the ads.
The main concern lies in crypts such as Bitcoin System or Ethereum that can be traded in crypto exchanges spot.
In fact, we can assume that the need for regulation arises with the rapid increase in the number of Bitcoin-related ads in the country.
Therefore, the authorities are concerned that the advertisements will reach retail investors and that many of them will provide misleading information.
However, those crypts that serve as digital collectables, such as CryptoKitties, would be exempt from the new regulations.
An important aspect is that a public consultation on the proposal has been opened where interested parties can give their opinion. However, it is important to note that they will have until October 2 to do so.