Despite ongoing efforts by the United Kingdom’s Financial Conduct Authority (FCA) to regulate crypto advertising, illegal promotions continue to proliferate. A recent report reveals that only 54% of the 1,702 alerts issued by the FCA between October 2023 and October 2024 led to the removal of non-compliant crypto ads.
Limited Success in Tackling Illegal Crypto Ads
The FCA requires crypto-related advertisements to gain approval either directly from the regulator or through an FCA-authorized firm before going live. However, nearly half of the flagged ads remain online, raising concerns about enforcement.
While the FCA has the authority to impose fines or initiate criminal proceedings against violators, it has primarily focused on curbing the activities of financial influencers promoting unregistered crypto schemes. So far, no fines have been issued to companies failing to comply with the rules.
Google’s New Crypto Ad Rules for the UK
To align with the FCA’s regulations, Google Ads will introduce stricter advertising policies for crypto projects targeting the UK starting January 15, 2025. The new guidelines will require advertisers offering crypto exchange services to have FCA registration.
However, ads promoting hardware wallets for storing crypto keys, non-fungible tokens (NFTs), or other digital assets will not require FCA approval, as long as they don’t facilitate buying, selling, or trading services. Google also reminded advertisers to adhere to local laws in their target regions.
FCA Warns Against Unregulated Projects
The FCA continues to issue warnings about unregulated crypto projects operating in the UK. One such example is Retardio, a Solana-based memecoin project flagged by the FCA on December 16, 2024.
The watchdog cautioned UK citizens against engaging with Retardio, which it alleges is offering financial services without FCA authorization. It reminded consumers that dealing with unauthorized projects exposes them to significant risks:
- They are not protected by the Financial Ombudsman Service, which resolves financial disputes.
- They lack access to the Financial Services Compensation Scheme, which safeguards consumers when companies go bankrupt.
The Road Ahead for Crypto Advertising in the UK
The FCA’s focus on protecting consumers from misleading crypto advertisements highlights the challenges of regulating a rapidly growing industry. Stricter ad requirements, such as Google’s upcoming policies, may help reduce illegal promotions. However, the regulator’s limited enforcement actions against non-compliant firms could leave gaps in consumer protection.
The UK government’s stance on crypto regulation and enforcement in 2025 will likely determine how successfully the FCA can clamp down on illegal promotions and build trust in the sector.
