LONDON—The U.K.’s new digital asset marketing rules are now in place, bringing digital asset promotion rules in line with those applying to more traditional financial assets, according to a new report.
Under the new rules, in force from Oct. 8 as part of the U.K.’s Financial Services and Markets Act (FSMA) overhaul, it is a criminal offense for unlicensed digital asset firms to market digital asset products to anyone in the country, even where those promotions originated overseas.
Must Comply With Guidance
Additionally, CoinGeek reported any promotions that are issued must comply with guidance issued by the Financial Conduct Authority (FCA).
“This guidance includes a requirement that digital asset promotions must not be misleading, must attach adequate risk warnings, and that first-time investors be subjected to a 24-hour ‘cooling off period’ between creating an account and being able to purchase digital assets,’ CoinGeek stated.
Four Routes
According to the CoinGeek analysis, essentially, the new law and FCA rules mean there are just four routes to legally promoting digital assets—any promotion that does not fall into these categories is illegal as of Oct. 8:
- The promotion is made by a licensed entity
- The promotion is made by a non-licensed entity but approved by a licensed entity
- The promotion falls under the money laundering rules exemption, meaning the promotion is made for or on behalf of a business that is registered with the FCA under its money laundering regime
- The promotion falls under certain other exemptions set out in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005—for example, if the person being promoted is a high-net-worth individual.
Failure to comply with the new rules is a criminal offense carrying up to two years imprisonment, a fine, or both, CoinGeek noted.
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