Crypto firms failing to spell out risks, says UK watchdog
LONDON: Britain's financial watchdog said on Wednesday (Oct 25) that firms marketing cryptoassets are failing to highlight risks properly to consumers, such as by publishing warnings that are too hard to read.Britain's Financial Conduct Authority had new powers from Oct 8 to regulate cryptoasset promotions, and said it has found three common issues so far, and will take action if they are not remedied.The FCA said that promotions were making claims about safety, security and ease of using cryptoasset services without highlighting the risks involved.Risk warnings were in small print or hard-to-read colouring, and there was a lack of adequate information on risks from specific products being promoted, the FCA said."We expect authorised firms approving the financial promotions of cryptoasset firms to take their regulatory obligations seriously," the FCA said in a statement."Where this is not happening, we will take action and have already placed restrictions on an authorised firm to restrict it from approving cryptoasset financial promotions."The FCA said on Oct 10 that it was stopping peer-to-peer platform rebuildingsociety.com from approving financial promotions for Binance and other cryptoasset firms."Even with the new marketing rules, cryptoassets still remain high risk and largely unregulated.
If something goes wrong, it is unlikely people will have access to consumer protections, so should be prepared to lose all their money," the watchdog said.
