UK's New Crypto Regulations to Be Effective on October 8, 2023

Global cryptocurrency exchanges are rushing to meet the latest regulations introduced by the UK's Financial Conduct Authority (FCA), effective 8 October 2023, with broad implications and heavy penalties for those who do not comply.

The incoming financial promotion rules include strict marketing guidelines that explicitly prohibit firms from engaging UK audiences unless registered with the FCA as a cryptoasset firm. To date, only 41 companies appear on the FCA's list of registered cryptoasset firms. Activities including the exchange of cryptoassets, tailored landing pages, sponsored reviews, and app listings for UK customers, are likely to fall under guidelines.

A release from the FCA warns platforms and promoters that a breach of these rules may be considered a criminal offence, which could lead to a maximum of 2 years imprisonment, a fine without limits, or both. These regulations extend globally to businesses and individuals that promote crypto services including affiliates, comparison sites, influencers, crypto exchange review sites, conference organisers, and more, underscoring the FCA's tough new crypto guidelines.

Despite the British government's announcement in 2022 of its intention to make the UK a global cryptoasset technology hub, international companies will be most impacted as routes to communicate to retail UK audiences are limited to firms with a cryptoasset registration, FCA licence, an exemption, or through the use a licensed approver with who has prior permission from the FCA.

"There is strong resolve among legitimate operators to comply with the rules," said Asher Tan, co-founder and CEO of CoinJar, a crypto exchange. "We recognise the benefits of regulating cryptoassets. At the same time, the UK's regime is among the strictest globally. It has been a massive burden on startups as well as their customers."

Mediums of communication highlighted for scrutiny include websites, mobile apps, social media posts, and online advertising to ensure messaging is 'clear, fair and not misleading'. In April this year, the FCA and ASA published a guide for 'finfluencers' warning them of upcoming policing of cryptocurrencies by the FCA.