The Treasury has announced that a series of new laws will be passed to deal with misleading crypto-asset promotions.
A growing need for extra protection
It has been estimated that over 2.3 million people in the UK own a crypto-asset but the UK government is worried that the vast majority may not fully understand the complexities of what they are actually purchasing.
It comes as a number of cryptocurrencies, including Bitcoin, continue to be unregulated with investors lacking key protections when venturing into the largely vague world of crypto-assets.
NFTs, or non-fungible tokens, also tend to lack the same protections but they will not be covered by the new rules coming into place.
The same rules for all
In response to this growing trend, the government has promised that “qualifying crypto-assets” will soon be subject to the same Financial Conduct Authority (FCA) rules of other financial promotions such as stocks, shares, and insurance products.
Chancellor Rishi Sunak agreed that these new rules would provide greater protection for consumers “while also supporting the innovation of the crypto-asset market”.
“Crypto-assets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims,” he said.
The government is still in the process of drafting a definition of crypto-assets that will fall under the new rules with no specified timeframe for when this process will be complete.
An urgent priority
The Advertising Standards Authority (ASA) has also called for further protections for crypto-assets after referring to Bitcoin, in particular, as a “red-alert priority” following concerns that various adverts fail to fully explain the risks involved when investing in cryptocurrency.
It has already banned a pizza chain and a football club from promoting crypto-assets and is currently working on a set of new guidelines for advertisers to adhere to going forward.
