The cryptocurrency exchange platform, Luno will temporarily halt certain clients in the UK from making cryptocurrency investments, effective from October 6. This suspension comes just two days ahead of the UK Financial Conduct Authority's (FCA) new crypto promotion rules, aimed at ensuring consumer protection and transparency in the sector.
The United Kingdom's FCA is planning to implement a series of rules that will significantly impact the way cryptocurrency is marketed and promoted within the country. These rules will reportedly categorize crypto as restricted mass market investments and impose stringent regulations on advertising and promotions within the crypto asset sector.
Luno Streamlines Operations
Specifically, all crypto-related advertisements or promotional materials will require clear warnings and must refrain from offering incentives. While these regulations were initially set to take effect on October 8, the FCA has permitted companies operating in the crypto asset space to seek an additional three months to align with these rules fully.
Luno, a prominent crypto exchange platform in the UK's market, is not alone in its response to the impending regulations. PayPal has announced its plans to halt crypto purchases until 2024 in response to the FCA's guidelines.
In a statement shared with Coindesk, Nick Taylor, the Head of Public Policy at Luno, acknowledged the need for change in response to the upcoming regulations. He stated, "The FCA has implemented new rules for crypto firms. As a result, all compliant crypto firms with UK customers are making a number of changes to their platforms in order to comply with the new regulations."
UK's Crypto Promotions and Travel Rule Regulations
Clients affected by Luno's temporary suspension of crypto investments will still have the option to sell their existing holdings and withdraw funds from the platform. Taylor emphasized that Luno is adopting a phased approach to reintroducing investment opportunities for its customers. However, Luno's clients will reportedly be unable to buy or trade crypto as of October 6.
With the impending implementation of the crypto asset financial promotions regime in the UK on October 8, 2023, the FCA recently undertook an extensive evaluation of the regulated crypto asset firms to gauge their level of preparedness. According to a report by Finance Magnates, the regulator determined that some firms had failed to comprehend the nature of financial promotions.
Additionally, crypto businesses in the UK are facing a significant regulatory shift after the FCA set the deadline for implementing the Travel Rule. Effective September 1, 2023, this rule mandates that crypto enterprises operating in the UK must adhere to stringent requirements, including collecting, verifying, and sharing crucial information related to crypto asset transfers.
