The U.K. government said it plans to strengthen the rules governing crypto ads to bring them in line with other financial assets.
The rules will increase consumer protection at the same time as they encourage innovation, the Treasury said in a statement Tuesday.The Treasury published a consultation response, saying that proposed legislation will also provide the UK financial watchdog, the Financial Conduct Authority (FCA), with the power to regulate the crypto market more effectively.The government began consulting on a proposed framework for regulating crypto promotions in 2020. Since then, the Advertising Standards Authority (ASA) has stepped in to ban misleading advertising on a number of occasions.Last year, the ASA banned what it called a “socially irresponsible” bitcoin ad while a group of crypto firms received warnings on crypto promotions. Earlier this month, the regulator banned two ads by Crypto.com saying the company was encouraging people to buy bitcoin with credit cards.A notable exception to the proposed rules is mention of the blockchain, which is considered not an asset but an underlying technology.“While most cryptoassets currently use distributed ledger technology (DLT), it might be that this changes as the technology and industry evolve,” the consultation response said. “Therefore, the government proposes to remove the reference to DLT from the definition of qualifying cryptoassets.”While the number of crypto users in the country is on the rise, “public understanding of cryptoassets is declining with only 71% of those who have heard of cryptoassets correctly identifying its definition,” according to the document.The announcement also said that the government intends to have a transitional period of about six months from the finalization and publication of the proposed Financial Promotion Order regime and the complementary FCA rules.
UPDATE (Jan. 18, 11:23 UTC): Adds blockchain exemption, ASA actions, length of consultation starting in third bullet point.