UK government announces official crackdown on ‘misleading’ cryptocurrency ads

Deepak Gupta January 18, 2022
Updated 2022/01/18 at 2:44 PM

The UK government has revealed which plans to update its laws to “bring cryptocurrency promotion within the scope of financial promotions legislation”. This will ensure that any crypto promotion is held to the same standards as the promotion of stocks, shares and insurance products. It also complies with the rules set by the Financial Conduct Authority (FCA).

Governments have recently started cracking down on cryptocurrency ads in an effort to protect consumers from scams they may not be familiar with. The Spanish government is currently laying down rules on how influencers and their sponsors promote cryptocurrencies. Meanwhile, the Singapore authorities He asked crypto companies not to market their services to the public. One type of scam is the “pump and dump”, in which fraudsters find ways to artificially inflate the value of a cryptocurrency and get people to invest money in it. They then offload their shares while the value is high to make a lot of money, thus lowering the currency’s value in the process.

According to the UK government, approximately 2.3 million people in the country are believed to have a crypto asset. While the popularity of cryptocurrencies is increasing, FCA research suggests (PDF) that the level of understanding of potential investors about them is declining. This means that people may not be fully aware of the risks involved when it comes to investing in them, which further supports “the case for regulatory intervention to ensure that crypto asset promotions are fair, clear and not misleading.”

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