Amid a surge in misleading crypto ads promising high returns, the government of the United Kingdom announced today that it is planning to strengthen rules on deceptive advertisements related to digital currencies.
New rules will enhance consumer protection through fair and clear communication. In an official announcement published by the Government on 18 January, Chancellor of the Exchequer, Rishi Sunak, said that the crypto market is exciting but it is important to protect consumers from misleading claims.
According to an estimate, over 2.3 million people in the UK are currently holding crypto assets. However, the understanding of digital currencies has declined in the last few years. The government aims to bring the promotion of crypto assets within the scope of financial promotions legislation.
“Cryptocurrency assets can provide exciting new opportunities, offering people new ways to transact and invest, but it’s important that consumers are not being sold products with misleading claims. We are ensuring consumers are protected, while also supporting the innovation of the digital asset market,” Sunak said.
UK’s Crypto Market
Digital currencies have gained immense popularity in the UK since the start of 2021. In October 2021, eToro published a report about the investing trends of UK-based retail investors. According to the report, British investors preferred XRP over other digital assets in the third quarter of 2021. While the UK government has recognized the potential of cryptocurrency assets, it highlighted the need for a regulated crypto advertisement structure for consumer protection.
“The government is eager to support innovation in crypto-assets and recognizes the potential benefits of certain products like stable coins, such as providing a more efficient means of payment, and in 2018 the government launched the Cryptoasset Taskforce, which continues to steer the UK’s regulatory response to the crypto-asset market. However, research undertaken by the FCA highlighted the potential for misleading advertising of crypto products to cause consumer harm,” the press release mentioned.
