By Alicia Maher
Cryptocurrency ads are being banned in the United Kingdom. The Financial Conduct Authority (FCA) said that advertising for high-risk cryptocurrencies would become limited. The move followed a surge in cryptocurrency advertising and celebrity endorsements. Its purpose is to safeguard investors unaware of the considerable dangers associated with these transactions.
The FCA is becoming stricter concerning financial adverts to guarantee that customers are safeguarded. According to the consumer watchdog, the amendments would require Britain’s consumer watchdog to tighten risk alerts and prohibit investment rewards like the new joiners bonus.
Experts argue that these commercials may lead consumers to assume that they are secure when, in fact, they may lose their cash if their investment skills fail. Several governments have restricted individual investments regarding recent occurrences, such as the COVID-19 pandemic in 2020 and cyber assaults on banks. For instance, just England rejected the submissions of 5 out of 10 investment corporations.
The Financial Conduct Authority has warned people against high-risk investments. They’re worried that several individuals are using them without fully comprehending the dangers. Assuming anything terrible happens, the activity may result in bankruptcy or financial catastrophe.
Involvement of Celebrities
As awareness of this novel financial invention has expanded substantially, the Financial Conduct Authority has issued a warning about the risks involved with virtual money. Several celebrities began pushing cryptocurrency firms on the internet without regard for their own or others’ security. Some people have even gotten into difficulties due to what they have stated on social media.
Two of America’s most prominent personalities, Kim Kardashian and Floyd Mayweather Jr., are being sued in the United States for inappropriately marketing a token. Iniesta, a soccer player, was chastised by the Spanish regulatory agency for endorsing Binance online. Since then, he has restricted marketing and has taken down every cryptocurrency-related content.
Matt Damon has been among the most outspoken advocates for developing technology and its advantages. He went on television a while back to publicize Crypto.com, a cryptocurrency platform that assists users in protecting their digital currencies investments.
Cryptocurrency Investing Adverts Revised Guidelines
London has experienced a surge in cryptocurrency trade, with countless advertisements adorning the United Kingdom’s capital streets. The Advertising Standards Authority, on the other hand, has slammed it.
Due to that, in December, the Advertising Standards Authority banned 7 advertisements. Rather, the advertising featured cryptocurrency comparisons to encourage people to trade. They expect that new norms for marketing with cryptos would emerge as a result of this.
Per consumer complaints, the FCA indicated that it is prepared to make various reforms. The simplicity and quickness in which individuals could make investments is a source of worry. According to the Financial Conduct Authority, these changes would safeguard people from being defrauded while seeking high-risk investments without enough knowledge or security against possible losses, as stated in its Consumer Investment Strategy issued 2021.
After public comment, the United Kingdom’s finance ministry had declared that they’d be putting cryptocurrency advertising under their jurisdiction. The UK government will classify some cryptocurrencies as limited mass-market investments. Due to that, just high-net-worth individuals and knowledgeable investors would afford them.
According to the FCA, businesses offering cryptocurrency marketing must meet clear and fair regulations. The Financial Conduct Authority expects businesses to be honest with their clients and not deceive them regarding the perks they provide.
The Financial Conduct Authority has stated that final guidelines will be released this summer. The new legislation is part of a larger push by UK officials to strengthen customer protections, particularly suggested firm-level requirements.