The Financial Conduct Authority, the UK’s financial watchdog, is facing challenges enforcing its rules on illegal cryptocurrency advertising. Although 1,702 illegal cryptocurrency ads, websites and apps were reported between October 2023 and October 2024, only 54% were removed online, with almost half still active and attracting potential investors or unsuspecting victims, the Financial Times revealed.
The Financial Conduct Authority (FCA) has the power to regulate such advertisements and bring criminal cases against individuals or groups that violate a new law aimed at fixing the chaotic side of the country’s cryptocurrency markets.
Current rules allow the Financial Conduct Authority (FCA) to review and approve such cryptocurrency-related advertisements or companies before they are published or run online. Despite this new rule and regulatory authorities, the The Financial Supervision Authority has failed and fully implemented, raising serious concerns about the regulatory body’s capabilities.
The FCA is focusing on “influencers”, rather than large cryptocurrency companies
Although the UK cryptocurrency market has seen some questionable advertising and marketing recently, the Financial Conduct Authority (FCA) has failed to fully implement the law. According to some observers, the government watchdog focused its resources instead on regulation “Influential people” Or influential financial individuals promoting crypto projects and businesses. Many of these influencers are active on social media, especially on Twitter/X, and often post tweets and marketing messages aimed at convincing followers to invest.
Recently, the Financial Conduct Authority (FCA) brought complaints against nine individuals who marketed unauthorized businesses containing high-risk derivatives as products on Instagram. The watchdog has also lodged complaints against TV stars who became famous on reality shows such as The Only Way is Essex and Love Island.
In October 2024, the Financial Conduct Authority (FCA) announced that it was investigating another 20 influencers who were illegally marketing financial products.
Some platforms get away with unauthorized cryptocurrency advertising
While social media influencers are being targeted, a lot of cryptocurrency companies are skirting the laws. According to the commentators Financial Supervision Authority He faces difficulty in prosecuting them and filing cases against them.
The reason for the oversight body’s inaction or lack of initiative can be traced back to current laws. Under current rules, the FCA cannot legally force these technology companies to remove these unapproved products Cryptocurrency Advertisements instantly.
The move to remove these ads must be voluntary. The good news is that some tech companies like Meta, Google, and Bing have agreed to remove these ads. Some cryptocurrency companies and operators know that the regulator’s hands are tied, and there is little they can do about the situation.
The UK is seeing a rise in the cryptocurrency space
The UK cryptocurrency space started slowly in 2013. Initially, there were a few technology and cryptocurrency startups, and only a few of them saw the potential of the technology. A year later, the UK Treasury began to notice the industry’s rapid growth by publishing research on cryptocurrencies and the need for monitoring and regulations.
In 2017, the issue of cryptocurrency regulation began to receive mainstream attention. During this time, the Financial Conduct Authority (FCA) entered the picture and warned the UK investing public about the risks of investing in cryptocurrencies.
Then, by the following year, the UK government launched a consultation to gain insights into how to regulate an industry while encouraging innovation. By 2021, the UK required cryptocurrency companies to register first before they could operate legally.
Featured image from Pexels, chart from TradingView