The Financial Conduct Authority, the UK’s financial watchdog, is facing challenges in applying its rules to illegal crypto ads. Despite flagging 1,702 illegal cryptocurrency ads, websites, and apps between October 2023 and October 2024, only 54% have been removed from the Internet, almost half of which are active and attract potential investors or unsuspecting victims, the -Financial Times revealed.
The FCA has the power to regulate these ads and bring criminal charges against individuals or groups who breach the new law which aims to tackle the dirty side of the country’s crypto markets.
Current rules allow the FCA to review and approve these ads or crypto-related businesses before they are published or run online. Despite this new law and regulatory powers, the FCA has failed to fully implement it, raising serious concerns about the capabilities of its watchdog.
FCA Focuses On ‘Finfluencers’, Instead Of Big Crypto Companies
Although the UK crypto market has seen some questionable advertising and marketing recently, the FCA has failed to fully enforce the law. According to some observers, the government watchdog instead focused its resources on controlling “finfluencers” or individual financial influencers who promote crypto projects and businesses. Many of these influencers are active on social media, especially on Twitter/X, and often send tweets and marketing messages aimed at convincing followers to invest.
Recently, the FCA filed complaints against nine people marketing unauthorized high-risk products as products on Instagram. The watchdog has also lodged complaints against TV stars who rose to fame on reality shows such as The Only Way is Essex and Love Island.
In October 2024, the FCA shared that it was investigating another 20 promoters who were illegally marketing financial products.
Some Platforms Go With Unauthorized Crypto Ads
While social media influencers are targeted, many crypto companies ignore the rules. And according to analysts, the FCA is facing difficulties in prosecuting and filing charges against them.
The reason for the watchdog’s inaction or lack of action can be traced to existing laws. According to existing rules, the FCA cannot legally force these tech companies to remove these unauthorized cryptocurrency ads immediately.
The step to take down these ads should 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 watchman’s hands are tied, and they can’t do much about the situation.
The UK Is Seeing a Growing Crypto Niche
The cryptocurrency niche in the UK started slowly in 2013. In the beginning, there were few tech and crypto startups, and only a few saw the potential of the technology. A year later, the UK Treasury began to recognize the rapid growth of the industry by publishing a study on digital currencies and the need for monitoring and regulations.
And in 2017, the issue of crypto regulation began to receive mainstream attention. At this time, the FCA entered the picture and warned the UK investing public about the risks of investing in crypto.
Then the following year, the UK government launched a consultation to find out how to regulate the industry while promoting innovation. And in 2021, the UK will require cryptocurrency companies to register first before they can legally operate.
Featured image from Pexels, chart from TradingView