The Financial Conduct Authority, the UK’s financial watchdog, faces challenges in enforcing its rules on illegal crypto advertisements. Despite flagging 1,702 illegal cryptocurrency ads, websites, and apps between October 2023 and October 2024, only 54% were removed online, with nearly half still active and luring potential investors or unsuspecting victims, the Financial Times disclosed.
The FCA has the authority to regulate these advertisements and file criminal cases against individuals or groups that violate a new law that aims to fix the messy side of the country’s crypto markets.
The current rules allow the FCA to review and approve these ads or crypto-related businesses before publishing or running online. Despite this new rule and regulatory powers, the FCA has failed to implement them fully, raising serious concerns about its watchdog’s capabilities.
FCA Focuses On ‘Finfluencers’, Instead Of Big Crypto Companies
Although the UK’s crypto market has seen some dubious ads and marketing lately, the FCA failed to implement the law fully. According to some observers, the government watchdog instead focused its resources on regulating the “finfluencers” or the financial individual influencers that promote crypto projects and businesses. Many of these influencers are active on social media, particularly on Twitter/X, and they often post tweets and marketing messages that aim to convince followers to invest.
Just recently, the FCA filed complaints against nine individuals who marketed an unauthorized business with high-risk derivatives as products on Instagram. The watchdog has also filed complaints against TV stars who became popular in reality shows like The Only Way is Essex and Love Island.
In October 2024, the FCA shared that it was investigating 20 more influencers who were illegally marketing financial products.
Some Platforms Get Away With Unauthorized Crypto Ads
While social media influencers are being targeted, plenty of crypto companies are skirting the laws. And according to commentators, the FCA is having difficulty prosecuting and filing cases against them.
The reason for the watchdog’s inaction or lack of initiative can be traced to existing laws. According to existing rules, the FCA cannot legally force these technology companies to remove these unapproved cryptocurrency ads instantly.
The move to take down these advertisements must be voluntary. The good news is that some tech companies like Meta, Google, and Bing have agreed to remove these ads. And some crypto companies and operators know that the watchdog’s hands are tied, and they can’t do much about the situation.
UK Sees A Growing Crypto Niche
The cryptocurrency niche in the UK started slowly in 2013. Initially, there were a few tech and crypto startups, and only a few saw the technology’s potential. After a year, the UK Treasury started to note the industry’s fast growth by publishing research on digital currencies and the need for monitoring and regulations.
And in 2017, the issue of crypto regulation started to gain mainstream attention. During this time, the FCA entered the picture and warned the UK investing public about the dangers of crypto investing.
Then, by the following year, the UK government launched consultations to get insights into how to regulate an industry while promoting innovation. And by 2021, the UK has demanded cryptocurrency companies to register first before they can legally operate.
Featured image from Pexels, chart from TradingView
