The UK Government is proposing to expand the perimeter of the financial promotions regime to include certain types of cryptoasset.
The proposed new rules seek to safeguard consumers against misleading and inadequate claims as to the rewards and risks involved in investing in financial products and cryptoassets.
The laws will apply to unauthorised firms selling financial products and to company's involved in the crypto market.
The economic secretary to the Treasury & City Minister, John Glen says: "If adverts by unauthorised firms are misleading, or don’t fully outline the risks, then people can end up losing money. That’s why we want to put more protections in place around such financial promotions, including the promotion of cryptoassets, while continuing to ensure people have access to a wide range of products on the market."
The proposals would mean that authorised firms will now have to obtain specific FCA consent to approve the financial promotions of unauthorised firms, giving the FCA the inside track on products being offered to consumers.
On cryptoassets, the influential Treasury Select Committee last year called on the Government to take action to regulate a "Wild West" market that offered little financial protection to consumers.
The promotion of cryptoassets is currently unregulated, but their proliferation, and the fact they are often targeted towards retail investors, underscores the importance of promotions being candid about the risks involved, agrees the Treasury.
To ensure this, the Government proposes to expand the perimeter of the financial promotions regime to include certain types of cryptoasset. This would mean that their promotion would be held to the same high standards for fairness, clarity and accuracy that apply to traditional financial services promotions.
Consultations on the plans have opened and will run from 20 July until 25 October.