CryptoUK, a crypto industry group in the U.K., is concerned that a proposed ban on incentives could drive businesses out of the country. The Financial Conduct Authority (FCA) in June published its planned regulatory regime for crypto advertisements and promotions for public comment, which included a ban on crypto incentives. This new promotions regime is set to take effect on Oct. 8.
Whilst members acknowledge that the rules have been extended to the crypto asset industry to minimize consumer detriment, the FCA should keep in mind that certain aspects of the rules (such as incentive bans) may make it challenging for firms to be commercial and competitive and may cause the unintended consequence of forcing firms to move their operations out of the U.K., said CryptoUK in response to the FCA’s proposals on Wednesday.
The government passed a financial markets bill into law in June that brought crypto promotions into the FCA’s remit and the watchdog has since said it aims to treat risks with the appropriate regulatory approach. Though CryptoUK generally agreed that crypto adverts should be “fair, clear and not misleading,” as the FCA sets out, it said the regulator’s guidance on the rules needed more clarity.
CryptoUK members asked for more clarity on what counts as a financial promotion, what promotions activities outside the U.K. would be monitored, and if the FCA will set out what other jurisdictions’ laws would be equivalent to its own so that international companies don’t have to adjust to the new ad rules. The lobby group also said that the term “qualifying crypto assets” is open to interpretation and called for clarity on what falls into its scope.
These rules are designed to be proportionate, evidence-based and strike the right balance between protecting people and enabling sustainable innovation in the sector, said an FCA spokesperson.
CryptoUK is concerned that the proposed ban on crypto incentives could drive businesses out of the U.K. The lobby group has asked for more clarity on the FCA’s rules, including what counts as a financial promotion, what promotions activities outside the U.K. would be monitored, and what other jurisdictions’ laws would be equivalent to its own.