• The United Kingdom’s financial watchdog, the Financial Conduct Authority (FCA), has proposed a new financial promotions regime that could see crypto firms face up to two years of jail time for failing to meet certain requirements around promotion.
• Under the FCA’s proposed regime, crypto firms would need to either have authorization from the FCA to advertise their services or have an exemption under the Financial Promotion Order.
• Any promotion made outside of these routes will be in breach of the Financial Services and Markets Act 2000 (FSMA), which carries a criminal punishment of up to two years of imprisonment.

U.K.’s Proposed Crypto Advertising Regulations

The U.K. Financial Conduct Authority (FCA) recently revealed a proposed “financial promotions regime” that could potentially see executives of crypto firms face up to two years in prison for not meeting certain requirements when advertising their services to customers in the country.

Requirements For Crypto Firms

Crypto businesses marketing their services to U.K. consumers must comply with the following four requirements:
1) The promotion is communicated by an FCA-authorized person;
2) The promotion is approved by an authorized person;
3) The promotion is communicated by a registered crypto asset business; or
4) The promotion complies with conditions within the Financial Promotion Order.

Consequences Of Non-Compliance

If any promotional activity falls outside of these four routes, it will be considered in breach of the Financial Services and Markets Act 2000 (FSMA). As such, firms found guilty could face criminal penalties with punishments extending up to two years imprisonment depending on severity.

Encouragement From The FCA

The FCA encourages all cryptoasset businesses operating in or targeting U.K customers to take necessary steps now in order ensure they can legally promote their services without facing legal consequences down the road if/when this regulation comes into effect.

Conclusion

It remains unclear whether Parliament will pass this legislation and how long it may take for it to come into effect should it be approved, however what is certain is that all involved parties must take necessary steps now towards getting compliant or risk facing significant legal punishment should they fail in doing so once this regulatory framework passes its official approval process .