Author: Syedur Rahman 3 February 2022
While the Treasury itself announced at the start of the year that it planned to toughen the rules regarding the advertising of cryptocurrency, the recognition of the need for action seems to have gained momentum.
One of the aims of the Treasury’s proposed rule strengthening was to reduce the risk of consumers being duped by misinformation.
That risk has since been highlighted in the just-published Treasury Committee report on Economic Crime. The Committee has emphasised the importance of integrity in the advertising and promotion of crypto products.
The Committee’s report summary states: “ We note the increasing risks around cryptoassets and economic crime. We welcome the announcement by the Treasury that the Government will legislate to bring advertising of cryptoassets advertising into line with that of other financial services and products.
“The Government should ensure that there is proper consumer protection regulation across the whole cryptoasset industry. Not all cryptoasset firms have been registered for anti-money laundering (AML) purposes. It is unacceptable that, having introduced AML regulations for cryptoasset firms in 2020, there are so many firms which have not yet been registered.’’
As we have previously reported, the Financial Conduct Authority (FCA) is seeking to tighten the rules on advertising. With the FCA set to become responsible for overseeing the promotion of cryptocurrencies, it is set to insist on starker risk warnings in adverts and impose new conditions that will have to be met before planned promotions can be published.
The FCA has made it clear that while around 2.3 million UK residents own cryptoassets, a proportion of those who bought them in response to adverts now feel that they were misled about what they were being sold. Recent events indicate that the FCA is not the only official body that holds this opinion.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.