Main navigation

British Watchdog FCA Considers Further Strengthening of Crypto Regulation: Discussion Started

News
Thu, 04/29/2021 - 11:35
article image
Vladislav Sopov
The promotion of cryptoassets services should be regulated: FCA's discussion paper
British Watchdog FCA Considers Further Strengthening of Crypto Regulation: Discussion Started
Cover image via stock.adobe.com
Read U.TODAY on
Google News
Contents

The Financial Conduct Authority, a top-tier United Kingdom regulator in the sphere of finances and banking, has released "discussion paper" DP 21/1: "Strengthening our financial promotion rules for high-risk investments and firms approving financial promotions." What does this mean for crypto?

Should we classify cryptocurrencies as high-risk assets?

The Financial Conduct Authority has released a thesis to initiate a discussion crucial for the entire fintech scene. It is designed to elaborate new rules of "promotion" for all "high-risk" services.

FCA releases discussion paper
Image via Twitter

The authors of the document call for all interested parties (including "firms operating in the cryptoassets market") to join the discussion about financial service promotion.

While the document itself just asks financial services vendors about the exposure of their clients to high-risk products and possible new regulatory measures in this field, it definitely looks like crypto promotion regulation rules will be also strengthened.

The Treasury proposed bringing some cryptoassets into the scope of the financial promotion regime, to enhance consumer protection. The issues discussed in this paper may be relevant to promotions for cryptoassets to the extent they are brought within the scope of the financial promotion regime.

Given the fact that cryptocurencies derivatives promotion to retail clients has already been banned in the UK pursuant to FCA PS20/10, new measures may affect spot trading platforms.

Market newbies are interested in cryptocurrencies

DP authors also admitted that new "self-directed" investors show big interest in cryptocurrencies. Unfortunately, 45 percent of them did not view "losing some money" as a potential risk of their activity.

As a result, cryptocurrencies services promotion should be regulated to protect unqualified traders from being exposed to extra risks, the document says.

Related
BREAKING: Crypto Asset Businesses Now Have to Submit Financial Crime Report: FCA Watch Dog

As covered by U.Today previously, FCA is well known as one of the strictest watchdogs in the cryptocurrency segment. Besides banning crypto derivatives trading to retail clients, it also made all regulated platforms file financial crime reports.

article image
About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)