Members of Parliament (MP) in the UK have called on the Financial Conduct Authority (FCA) to limit the use of the word ‘investing’ and ‘investing’ by cryptocurrency companies for promotional purposes.
According to a December 9 report in The Times, MPs on the treasury selection committee told FCA chief Nikhil Rathi that the use of the word “your investment” often indicates that they are on par with a FTSE 100 company or unit trust, therefore giving a wrong impression about the type of investment. Harriett Baldwin, Conservative MP from West Worcestershire made a special exception to the FCA’s alleged inability to stop fraudulent promotions and went on to accuse them of aiding criminals:
“Their website actually publishes a list of unregistered crypto-asset deals for anti-money laundering purposes. It’s meant to be useful, but it could also be useful for someone who just wants to launder money. “
Rathi assured that the regulatory body is currently investigating the matter and also expects new powers in terms of regulating crypto ads. Nevertheless, Unless those new powers are put into practice, there is not much the main regulatory body can do.
“We will have a discussion about what the wording should be,” said the FCA chief.
Previously, FCA President Charles Randell had raised concerns about the wording of the Floki Inu advertisement on London buses, but admitted that there is not much more that can be done than cautionary warnings for consumers.
The head of the FCA also said that the agency is considering dismissing any request for compensation under the Financial Services Compensation Scheme if people lose money in cryptocurrencies:
“Personally, I would suggest that we just say that anything related to cryptocurrencies should not be entitled to compensation so that consumers are clear when they invest.”
In July 2021, the Advertising Standards Authority in the UK issued a red alert against misleading crypto advertising and warned consumers to beware of such advertisements.
In addition to the United Kingdom, India is another country where authorities have had to get involved due to the lack of disclaimers in cryptocurrency advertisements. The Delhi High Court recently issued a notice to file standardized disclaimers for crypto advertisements.
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