In the shadow of the decision by the U.K. Treasury to halt the release of a government-backed non-fungible token (NFT), the Government plans to promote and regulate the cryptocurrency industry are still moving forward.
The Financial Services and Markets Act amendment, which will enable the Financial Conduct Authority (FCA) to regulate crypto firms under the existing promotions law set out in the Financial Services and Markets Act (FSMA), is expected to be in force by late 2023.
The rules aim to protect consumers from misleading crypto asset promotions, which is a step in the right direction for safeguarding the industry’s reputation and promoting safe investing practices.
FSMA includes a limited-time exemption for crypto companies registered with the FCA, allowing them to approve their own ads as opposed to relying on others to do so. While some companies are authorized under the FSMA to approve their own ads, crypto companies do not fall under that umbrella, making it difficult and costly for them to win acceptance.
The estimated cost of third parties approving crypto ads is between £5,000 to £15,000, depending on the complexity of the materials. By allowing crypto companies to approve their own ads, the new legislation aims toreduce the cost and complexity of advertising their products.
The move to regulate and promote the cryptocurrency industry is a necessary step for the U.K. Government to ensure that the industry can thrive in a safe and secure environment.
While the recent decision to halt the government-backed NFT may have disappointed some crypto enthusiasts, it is important to proceed with caution when investing in emerging technologies.
Regulating the industry under the existing promotions law set out in the FSMA will help to protect consumers from misleading promotions and establish a clear set of guidelines for crypto companies to follow.
As the global cryptocurrency industry continues to evolve and advance, it is essential that governments around the world work together to promote the industry while also protecting consumers from the risks associated with investing in these emerging technologies. With the FiSMA amendment soon to be discussed in Parliament, the U.K. is taking a step forward in this direction and will hopefully provide a model for other countries to follow.