The UK Financial Conduct Authority (FCA) has announced that it will prohibit the promotion of digital assets through free non-fungible tokens (NFTs) and cryptocurrency airdrops. Matthew Long, director of payments and digital assets at the FCA, stated that “incentives for the general public to invest in cryptocurrencies will be banned” when the new rules come into effect on October 8th.
The FCA’s policy document from Thursday stated that when it consulted on its marketing rules last year, respondents largely disagreed with the proposed restrictions. However, Long said that the FCA chose rules that it believed were the “safest possible set of rules.”
Crypto airdrops and NFTs themselves will not be banned, only promotions involving airdrops. The FCA has also proposed a new authorization regime for all crypto firms, including those already registered with the FCA, that would be run by the regulator.
Will Charlesworth, crypto assets partner at U.K.-based Keystone Law, welcomed the regime as something that would ensure consumers are protected, saying “The stability and oversight of the latest FCA changes will potentially enhance consumer and market confidence in the digital assets sphere.”