By Adam Green
As of the 8th of October, the financial conduct authority is implementing tighter restrictions on the marketing of cryptocurrencies alongside a host of changes brought into place over the last two years in a continued effect to ‘protect’ the UK population.
The FCA have restricted new accounts on any exchange. Forcing a 24-hour cooling off period with a prompt asking the user if they wish to continue their account. The intent for is to prevent rushed decisions in the market that lead users to quick losses during volatile movements in the market.
In addition to this, a ban on any marketing advertising bonus’ for ‘refer a friend’ policies comes into place on the 8th. The FCA views this as a means to ensure new users are given a clear, fair, and un-misleading, choice to sign up for an exchange. These marketing restrictions come following the FCA taking full authority over UK Cryptocurrency advertisements in agreement with the Advertising Standards Authority (ASA).
When discussed amongst MP’s, their statement was a concise one. “Cryptocurrency is closer to gambling than a financial service”. Stating that “many regret investing in crypto”. This seems likely to reflect retail traders who would have invested back in 2021. The fallout from this is that several major exchanges have halted or withdrawn their services from the UK. The FCA now also requires exchanges to be registered. Resulting in exchanges Bybit and Luno to withdraw until compliant. Luno is linked to PayPal which has also indicated a pause in any crypto services until they’ve had time to review these regulation changes.
Now how long do exchanges have to abide to these regulations? Well, the FCA has announced a 3-month extension that exchanges can apply for ensuring that by 8th of January. They are found to be compliant with the regulations.
Empire members in the UK should have now received an email from any exchange they are signed up to indicating them of changes to their platform and the FCA have said that exchanges not following these regulations are liable for heavy fines and up to two years in prison where individuals are held responsible.
One such exchange currently seeming to continue their path and one of few places allowing futures trading in the UK following the attempt to ban futures by the FCA since 2021 is Kucoin, founded in 2017 and ranked as the 4th biggest exchange, they have shown no such intent to change, even sending multiple push notifications at the time of writing encouraging users to sign friends up to the platform, this may halt from the 9th onwards but time will tell. The FCA did offer comment to CoinDesk that they believe several international firms have no intent of compliance. As this unfolds, we will continue to provide updates for UK members of Empire.