The UK government has announced that it wants to get rid of the “misleading and inappropriate promotions” that we are currently seeing in the cryptocurrency industry. This would imply that the country could be about regulating Bitcoin ads.
Regulated advertising in the UK?
Yesterday a class action lawsuit was announced in Australia against Google, Facebook and Twitter for banning cryptocurrency advertising on their platform. And now a proposal has been published for the UK financial regulator to regulate crypto advertising.
Yes, this plan involves the Financial Conduct Authority (FCA), who, if approved, would be in charge of monitoring the announcements issued by unauthorized companies, including those related to cryptocurrencies such as Bitcoin.
But this plan should not take us by surprise. In 2018 the government had already exposed the problem by pointing out that “Ads often exaggerate the benefits and rarely warn of volatility risks.”
Accordingly, John Glen, UK Secretary of the Economy, assured that they want “to put more protections around such financial promotions, including the promotion of crypto assets” such as Bitcoin.
However, Glen assured that they want to do it in such a way that they continue to guarantee access to a wide range of market products.
What would be the regulations?
Aiming that crypto companies don’t trick potential investors, the plan proposes that the FCA take control over a “regulatory gateway.”
This means that the FCA will impose a control through which companies seeking to advertise their products must pass.
Consequently, those companies that do not have the approval will not be able to place announcements about their crypto services or about Bitcoin in the country.
In this sense, they must have the specific consent of the FCA to approve the financial promotions. In the event that a company promotes its products, the FCA may compel the removal of advertisements.
The main concern resides with crypts like Bitcoin or Ethereum that can be traded on crypto spot exchanges.
In fact, we can assume that the need for regulation appears with the rapid increase in the number of Bitcoin-related ads in the country.
As a result, authorities are concerned that the ads are reaching retail investors and that many of them are providing misleading information.
However, those cryptos that function as digital collectibles, 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 express their opinion. But, it is relevant to note that they will have until October 2 to do so.