Under new regulations set by the UK’s Financial Conduct Authority (FCA), crypto advertisements must now prominently feature explicit risk warnings.
The FCA has directed firms to inform clients, through their ads starting 8 October this year, that they may not be shielded should their investments falter.
Such alerts might suggest to customers that should any issues arise, they should be ready to forfeit their entire investment. The FCA also encourages companies to provide a ‘cooling off’ duration for novice investors.
Companies advertising crypto assets like Bitcoin will be required to offer a delay period for new investors looking to engage in their offerings. Additionally, incentives for referring friends to a company’s products will be prohibited under the new guidelines.
Sheldon Mills, the FCA’s Executive Director of Consumers at Competition, stated in The Guardian, “It’s individuals’ choice to purchase crypto, yet many laments making rash decisions. Our regulations provide people with the necessary time and appropriate risk warnings to make a well-informed decision.”
He further cautioned, “Consumers should remain mindful that the crypto sector is primarily unregulated and high risk. Investors should be ready to lose their entire investment.”
