Regardless of whether they are located in the UK or the type of technology they use, businesses that sell ‘eligible crypto assets’ to UK customers must comply with the Financial Conduct Authority’s Financial Promotions Regime. We published a Cooley Alert in March 2023 summarizing this regime. Last month, we noted that the FCA had issued a “final warning” to businesses promoting crypto assets to UK consumers, reminding them that they needed to prepare for the regime.
This regime took effect on October 8, 2023. On the same day, the FCA issued 146 warnings identifying companies it believes may be illegally promoting crypto assets to UK consumers. It is clear from this list that the FCA does not hesitate to issue warnings to companies based outside the UK.
The FCA’s ‘final warning’ will see social media companies, search engines, app stores and others play their part in ensuring that illegal financial promotions are not passed on to UK consumers by unregistered crypto companies. These intermediaries are at risk of committing money laundering offenses under POCA if they support unregistered crypto-asset companies, for example by promoting advertisements. There is a possibility. It also indicated that the promotion of illegal crypto assets would be considered “unlawful content” under the new online safety legislation, and that the FCA and Ofcom were working closely together on this issue.
The FCA’s statement accompanying the warning urged intermediaries to take into account previous warnings.
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