Towards putting an end to misleading and inadequate promotions in the UK, authorities have proposed that crypto ads be regulated by the country’s Financial Conduct Authority (FCA).
Bad actors in the crypto space who try to profit from investors fraudulently are one of the biggest ills and threats the crypto industry has to deal with victims who fall prey to them lose their money without any legal redress or any compensation.
It is as a result of similar issues Her Majesty’s Treasury is proposing that the FCA gatekeep crypto firms allowed to promote crypto ads in the country.
Authorities’ issues with crypto Ads
In a report published in July 2018, a problem authorities had with crypto ads was that they often overstate benefits and rarely warn of volatility risks, the fact consumers can both grow and lose their investment, and the lack of regulation.
However, research has shown that people in the UK continue to invest in crypto thanks to these adverts. Last year, the government found that the number grew by 2.35 percent, from 1.5 million people to 2.6 million people.
Hence, as a way of protecting citizens and investors from crypto firms, he Treasury proposes that the FCA assumes control over a “regulatory gateway” that crypto companies looking to advertise their products must pass through.
Mixed feeling trail HM treasury proposal
The proposal by Her Majesty Treasury has brought about counter-reactions amidst stakeholders in the crypto space, with some believing it’s a good idea while others against the move.
“I think this is good news,” Stani Kulechov, CEO and founder of London-based crypto loans company Aave, said He believes if the move would end scammers in the space, then it is a good move.
Mariana Gospodinova, general manager of Crypto.com’s Europe business, also said that it is a good idea as it will eliminate dubious scammers trying to cash in on cryptocurrency.
Konstantin Anissimov, executive director of crypto exchange CEX, however, said the regulation could be devastating. He believes it would make marketing products more difficult.