As crypto companies continue to come under fire in the United States, the UK’s Financial Conduct Authority (FCA) has concluded plans to enforce new rules to protect crypto investors in the country and curb losses suffered by crypto users. The rules which were announced on Thursday, would take effect in October.
One of these measures is a ban on the “refer a friend” policy which is designed to encourage crypto investors to earn more by bringing others into the investment. The authority is also mandating crypto companies pushing crypto products to alert their customers on the possible risks that could be incurred in high investment.
Furthermore, amateurs in the crypto investment space should be introduced to a stand-down period by marketing firms promoting crypto products. Head of Consumers and Competition at the FCA, Sheldon Mills, said that the rules are designed to offer consumers the right warnings.
“Our rules give people the time and the right risk warnings to make an informed choice,”
Sheldon Mills
Recall that Britain introduced a legislation earlier this year to bring crypto promotions under FCA control. Similarly, Britain’s lawmakers are now demanding stiffer regulations of crypto industry just like the country’s gambling industry.
However, not everyone is taking the new measures in good candor as crypto players are kicking against it. The Director of Operations at industry group, Crypto UK, Su Carpenter, in a statement, argued that the new rules are liable to discourage new crypto investors.
“There is a risk that this solution will both unfairly concentrate market power for those firms which are already authorised and potentially encourage unauthorised firms to operate from outside of the UK
Su Capenter
She added that the rules might therefore put businesses established in the UK at a competitive disadvantage and consumers’ protections.
Read More; $45 million was lost to crypto rug pull in May, outpacing DeFi exploits
The wake of increased regulation in the United States
The United States’ Securities and Exchange Commission, on Tuesday, sued the largest digital currency trading platform in the country, Coinbase. The SEC claimed that Coinbase made billions of dollars by illegally facilitating the buying and selling of crypto assets.
Following this news, SEC announced charges against Binance, a competitor of Coinbase, and its founder Changpeng Zhao for a number of alleged violations of the Securities Exchange Act.
The report accompanies wake of the catastrophic collapse of the world’s largest cryptocurrency exchange, FTX, in November, fueling worries about a market some critics have tagged infrequent.
Rules for crypto trading platforms can be said to strengthen a world-first crypto financing regime, putting into consideration additional measures in place to safeguard clients from market manipulation.
Read More; Global crypto hacking falls by 70% in the first quarter of 2023
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