Cryptocurrencies are a risk and clients should be very careful when dealing with them. This is what the FCA said in yet another consumer warning against crypto investments, amid a sweep of social media posts promoting crypto assets and NFTs.
Even though some crypto businesses have already received the green thumb from the FCA, while others are waiting on their application, the UK watchdog has still voiced its concerns about the state of crypto instruments, more specifically the fact that there assets are decentralizes, and that there is no consumer protection programs for buyers and sellers of crypto. The FCA reminds the UK public that the FSCS – the Financial Services Compensation Scheme – does not shield from crypto risks or fraud.
Meanwhile, crypto marketers should be strictly abiding by the rules set out by the Advertising Standards Authority (ASA). All promoters must, above all else, state that they:
- do not provide crypto regulatory services
- are not covered by any monetary compensation schemes
Since January 2021 all crypto firms in the UK have been mandated to register with the FCA. Those that fail to do so will prosecuted. The previous deadline had been pushed for a certain few firms that were not able to meet the requirements, while many other have altogether pulled their FCA applications following the introduction of the crypto-registration rule.