The UK is no stranger to injecting restrictions for the crypto industry. In 2020, the country announced that all UK-based crypto-asset firms are required to register with the Financial Conduct Authority (FCA). Starting 10 January 2021, the law was put into effect and any non-registered operating firm was to be deemed unlawful.
Now, in another act, the country’s Advertising Standards Authority (ASA) introduces intensified ad restrictions, additional to those implemented in 2020, banning crypto-promoting advertisements by the popular cryptocurrency exchange firm, Luno.
The advertisements displayed the slogan “If you’re seeing Bitcoin on the Underground, it’s time to buy” on the side of buses and in underground stations. ASA described the aforementioned slogan as misleading since it does not showcase the volatility and risks involved with this industry.
“We concluded that the ad irresponsibly suggested that engaging in Bitcoin investment through Luno was straightforward and easy, particularly given that the audience is addressed, the general public, were likely to be inexperienced in their understanding of cryptocurrencies,” the ASA stated.
In a similar case, earlier this year ASA halted ads by the crypto exchange Coinfloor, reasoning that ads were “irresponsibly” promoting Bitcoin acquisition. Though, the ad contained a disclaimer which informed of the risks involved.
Can the UK Lead the World on Cryptocurrency Regulation?
A recent report by TheCityUK, Britain’s most influential financial lobby group, urges UK lawmakers to act fast and create a set of standards for crypto regulation. According to the report, the hard part about regulating crypto “is finding the appropriate balance between encouraging innovation, and providing regulatory clarity and ensuring that legislation mitigates possible risks raised by the relevant activities.”
The report points out four key recommendations as the essential features to be considered while policymaking for crypto regulation, they come as follow:
- The UK should immediately set high-level standards in crypto-asset and distributed ledger technology (DLT) regulation.
- The UK should pay heed to the risks and applications of these innovations.
- Britain should remain engaged with the industry.
- The country lawmakers should acknowledge the potential of stablecoins and CBDCs.
According to Miles Celic, chief executive of TheCityUK, there is a global race for grabbing the largest share of these innovations and the value they offer. “The ultimate winner is for markets to decide, but the government and regulators have an important part to play,” he added.
It remains to be seen whether the UK legislators respond to this request and set reasonable standards for cryptocurrency regulation, or continue disparaging the crypto industry.