UK’s Crypto Ad Ban: Why 50% Keep Thriving Despite the Restrictions!
In a world racing toward digital currencies, the UK’s Financial Conduct Authority (FCA) is grappling with a pressing challenge: rooting out illegal crypto advertisements. Between October 2023 and October 2024, the FCA identified a staggering 1,702 dubious crypto ads across websites and apps, but shockingly, only 54% were taken down. This means that nearly half remain online, actively enticing unsuspecting investors into potentially dangerous waters, as revealed by the Financial Times.
The FCA holds the reins to regulate these ads, and it can take legal action against those who flout the newly established laws aimed at cleaning up the crypto landscape. However, the reality is that the FCA has struggled to enforce these powers effectively, casting doubt on its capabilities as a financial watchdog.
FCA Targets ‘Finfluencers’ Over Major Crypto Firms
While the UK’s crypto space is rife with questionable marketing, the FCA seems to be diverting its focus toward “finfluencers”—those charismatic social media personalities promoting crypto ventures. These influencers dominate platforms like Twitter/X, crafting persuasive pitches to get their followers to invest.
Recently, the FCA took action against nine individuals for promoting an unauthorized high-risk derivatives business on Instagram, even extending its reach to reality TV celebrities from shows like The Only Way is Essex and Love Island. Furthermore, in October 2024, the FCA announced investigations into 20 additional influencers engaged in illegal financial product promotion.
Crypto Companies Slip Through the Cracks
In the midst of this crackdown on influencers, many crypto firms are managing to evade scrutiny. Analysts argue that the FCA is finding it increasingly challenging to take action against these companies, largely due to restrictions in existing laws. Currently, the FCA lacks the authority to compel tech platforms to remove unauthorized cryptocurrency ads immediately.
The process for eliminating these ads is largely voluntary. Fortunately, major platforms like Meta, Google, and Bing have stepped up, agreeing to scrub these ads from their sites. Yet, a significant number of crypto companies are aware of the FCA’s constraints and are leveraging this to their advantage, operating under the radar.
The UK’s Thriving Crypto Landscape
The cryptocurrency scene in the UK began its journey in 2013, with only a handful of startups recognizing the technology’s potential. By the following year, the UK Treasury began to take note of the industry’s rapid evolution, releasing reports highlighting the importance of regulation.
Fast forward to 2017, when crypto regulation became a hot topic, prompting the FCA to caution UK investors about the inherent risks of crypto markets. The following year, the UK government initiated consultations to explore how to regulate this burgeoning industry while simultaneously fostering innovation. By 2021, the UK mandated that cryptocurrency companies must register before legally operating.
Featured image from Pexels, chart from TradingView
