Under the new FCA regulations, cryptocurrencies will be classified as “restricted investments,” and cryptocompanies and issuers of digital assets must publish clear warnings in promotional materials about the risks of such investments. It will also be forbidden to use such marketing techniques as “invite a friend” or “bonuses for new members.. Another important innovation will be a “thinking investment” period for new investors, during which consumers will not be allowed to send funds on a direct financial offer without asking for reconfirmation after at least 24 hours.<br
As for the cryptocurrencies themselves, they must have sufficient reserves for the underlying crypto assets and provide investors with as much detailed information as possible so as not to mislead them. The penalty for violating any of these rules is up to two years in prison.
Sheldon Mills, executive director of consumer protection and competition at the FCA, said it’s up to people to decide whether or not they buy cryptocurrencies. However, FCA research shows that many people later regret hasty decisions. So the new rules give people time to make informed choices, Sheldon said. He mentioned a recent survey conducted by the agency among 2,000 respondents. It turned out that 40% of them bought cryptocurrencies for the excitement, and about 30% of investors regretted their investments in cryptoassets.
But Su Carpenter, chief operating officer of CryptoUK, the U.K. cryptocurrency trade association, called the regime overly restrictive. He fears that only a small number of organizations will meet the new criteria, and that the established barriers will only create imbalance in the local crypto industry.
Earlier this year, the FCA reported that 85% of cryptocurrency companies did not comply with anti-money laundering (AML) regulations, so the applications for registration submitted by these companies were rejected.<br