The Financial Conduct Authority has warned marketers promoting crypto asset products that “we will act” after discovering multiple instances of bad practice.
The regulator reviewed compliance with the financial promotion rules for crypto assets that were introduced in October 2023 and found numerous examples of poor practice.
“Firms have requested additional clarity on our expectations for these rules,” a spokesperson for the FCA said in a statement on Wednesday (7 August). “We want to work collaboratively with the sector to raise standards.
“We found multiple instances where firms did not meet the required standards. Where we identified concerns, we have worked extensively with individual firms to make significant improvements in line with our objectives. More work needs to be done to improve compliance.”
The watchdog said it has seen firms relying on comparisons with its peers to benchmark what is acceptable behaviour.
“If firms do not improve, we will act,” the FCA spokesperson warned. “All firms communicating or approving financial promotions must make sure they have strong systems and controls for compliance in place.
“We will also consider firms’ compliance with regulatory requirements, including the financial promotions regime, as part of any application to be authorised under the future financial services regulatory regime for crypto assets.”
Other findings from the investigation include instances where crypto assets were promoted as a stable asset despite them not maintaining a stable value – something the FCA has explicitly forbidden.
The full list of findings are available on a dedicated FCA webpage, here.