The Financial Conduct Authority (FCA), an independent financial regulatory board under the UK government, introduced new stringent rules and measures for the marketing of crypto assets, and this caused the exit of multiple high-profile departures as well as major realignments in the market.
The new regulations make it mandatory for the crypto firms to verify that the people have sufficient knowledge and notable experience in crypto before they make any investments with these firms.
What Are The New Changes That Law Firms Would Require To Undergo?
It will introduce a cooling-off period for first-time investors which is a waiting period of 24 hours after a new customer has made a request for the purchase of a crypto asset. The rules mandate that any financial promotions should not be made to the customer until this cooling-off period ends.
According to the new rules that would promote the crypto assets, there would also be extensive work along the government, as the govt bodies would consult with the Future Regulatory Regime for Crypto Assets and also collaborate with global counterparts and the wider aspects of the industry.
The new rules also make it mandatory for the crypto forms to include clear risk warnings to the customers that there is a high chance of them losing all of their money and they should be well aware of this before they invest in the crypto.
The FCA also strictly prevents the marketing of high-risk investments to consumers.
What Do The Officials Say?
The Executive Director of Consumers and Competition, Sheldon Mills, stated that it was up to people to decide whether they wanted to buy crypto. He quoted research that said many people make hasty decisions and regret afterward and the now implemented rules were to make sure that people get the right amount of time and also get all the risk warnings and therefore they would be able to make an informed choice.
Mills continued that consumers should be aware that crypto investments still were covered with hush risks and that they were also highly unregulated. And therefore those who make investments should be well aware that there is a risk of them losing all their money.
He added that the crypto industry would have to prepare for the significant changes that are on the way. He further said that the agency was working on more guidance to help the industry meet the expectations that had been put forward when the rules were introduced.
The Responses From The Crypto Community
Meanwhile, the giants and leaders of the crypto industry are not welcoming the new rules. They view that the new rules would make a lot of restrictions on them which has the potential to affect their dominance, market value, and competition.
The crypto community has already expressed their concerns months ago.
The Director of Operations of CryptoUK, Su Carpenter, emphasized customer protection but she was concerned about the extreme restrictions that the new regulations would put on the crypto firms.