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The UK Financial Conduct Authority (FCA) has implemented a series of mandatory rules to ensure that companies providing crypto services promote their products and services openly, fairly, and transparently. The crypto market regulations in the country have put many companies in a difficult position. As a result, prominent companies such as Binance, OKX, and PayPal have decided to terminate their services in the country.
The UK and the Crypto Sector
The stricter Financial Promotions (FinProm) practices, ranging from the ban on investment bonuses to a 24-hour waiting period for crypto investors, aim to help protect consumers from the high risks associated with crypto assets.
James Young, the Compliance Officer and Anti-Money Laundering Reporting Officer at on-ramp firm Transak, stated in a statement that the rules implemented for this sector in particular provide an opportunity for users to differentiate their crypto investments and strengthen the credibility of the crypto community:
“The more regulations there are, the more protection is provided for consumers. I believe the crypto industry is perceived as safer, and therefore, adoption is increasing exponentially.”
Global crypto companies will have to comply with the new FCA rules while also ensuring consistent compliance and user experience, particularly in advanced countries. Young stated that entities need to be separated to smoothly bring together different legal requirements and continued his statements:
“This is something that the FCA has identified as a challenge, especially for companies with complex group structures. There are some countries, like the UK, where the marketing of real promotions is very strict, and others have not even thought about what they really want to do with crypto companies in terms of regulation.”
Call for Uniformity in the Crypto Sector
James Young acknowledged the challenges authorities face in preparing legal regulations for the future and highlighted the need for uniformity in laws, considering the different crypto applications in various jurisdictions:
“Crypto is inherently global, and I would love to see more uniformity in how regulators around the world regulate the crypto sector. Secondly, I would like to see more detailed guidance on how crypto companies should comply with these new regulations.”
Calls for a broader global framework for the crypto sector are not new. A crypto regulatory roadmap that advocates comprehensive regulation of the crypto market within and beyond the G20 jurisdictions was unanimously adopted at the G20 summit, an intergovernmental forum consisting of 19 countries, including the UK, on October 13.
