The governments of both Spain and the United Kingdom are prepared to enact legislation to combat false cryptocurrency investment marketing that might result in investors losing money. There is no timetable for legislation in the UK, but the new standards will take effect on February 17 in Spain, according to the government.
All crypto advertisements will have to warn investors that “Investments in crypto-assets are not regulated,” and that all of the investors’ money might be lost, according to Spain’s National Securities Market Commission, which announced the new legislation on Monday. On Tuesday, the UK government made a decision to put such crypto asset advertising “within the ambit of financial promotions legislation,” in response to criticism. As a result, such endorsements will be subject to the same regulations as other investment options, such as stocks and insurance, in the United Kingdom.
Additionally, the Financial Conduct Authority (FCA) will have “adequate authorities to regulate the market more effectively” as a result of this new legislation. On the FCA’s proposed financial promotion guidelines for crypto assets, they will be conducting a public consultation.
Government officials in Britain said that the move would help to foster “innovation in the cryptocurrency asset market.” This is understandable, as the action would add much-needed oversight to marketing on crypto investments in the nation, rather than outright outlawing the activity as in certain other countries. It also alleviates a second, more pressing issue.
Last year, a study found that while the number of cryptocurrency investors is increasing, the public’s comprehension of a cryptocurrency is decreasing. Around 2.3 million Britons now possess crypto assets, and that number is expected to rise in the near future. There is a risk that these crypto-assets “may be mis-sold” because of the vast ambiguity, the UK government says. A study by the Financial Conduct Authority (FCA) also found that this might cause harm to the customer.
This has long been known to governments. Advertisements for cryptocurrencies swamped India’s main broadcast networks and social media late last year, raising worries. The Advertising Standards Council of India (ASCI) and the Ministry of Finance were keeping an eye on things. Though the planned rules have not yet been put in place.
Singapore has already barred any crypto businesses from promoting their services to the general public. As a result, the issue of misleading cryptocurrency marketing is global in scope, and the risk only increases as more investors enter the market. In the next months, we can expect to see more of these kinds of rules on crypto emerging from across the world.
