Illegal crypto ads continue to flood the United Kingdom despite warnings and regulatory measures by the Financial Conduct Authority (FCA). Only a fraction of the unauthorized promotions flagged by the regulator have been removed, raising concerns about enforcement and consumer protection.
Limited Impact of FCA Alerts
According to a recent report by the Financial Times, between October 2023 and October 2024, the FCA issued 1,702 alerts regarding illegal cryptocurrency advertisements. However, only 54% of these alerts led to the removal of the flagged ads, leaving nearly half still active.
While the FCA has the authority to impose fines or pursue criminal cases against violators, it has yet to penalize companies that fail to comply with its advertising regulations. These rules mandate that digital asset promotions receive approval from the FCA or an FCA-authorized entity before being published.
Focus on Financial Influencers
Instead of targeting companies directly, the FCA has concentrated its efforts on financial influencers promoting questionable schemes online. This approach aims to address the growing influence of social media in propagating crypto advertisements that may not meet regulatory standards.
Google Tightens Crypto Ad Policies
In response to the FCA’s push for stricter oversight, Google Ads has updated its guidelines to align with the UK’s crypto advertising rules. Starting January 15, 2025, crypto-related advertisers targeting UK audiences must obtain FCA registration.
Google’s policy changes will permit ads for:
- Crypto exchange products and services with FCA approval.
- Hardware wallets for private key storage.
- Non-fungible tokens (NFTs) and other digital assets, provided they do not offer buying, selling, or trading services.
Google reminded advertisers to comply with local laws in their targeted regions, reinforcing its commitment to regulatory compliance.
FCA’s Warning Against Memecoins
On December 16, 2024, the FCA issued a specific warning about Retardio, a Solana-based memecoin project. The regulator cautioned consumers that the project might be offering financial services in the UK without proper authorization.
The FCA urged citizens to avoid unregulated projects like Retardio, emphasizing the risks involved. Users who engage with unauthorized entities lack access to critical protections, such as the Financial Ombudsman Service for resolving disputes or the Financial Services Compensation Scheme for compensation in case of business failures.
Challenges in Enforcement
The persistence of illegal crypto ads highlights significant challenges in enforcing compliance within the dynamic and fast-evolving cryptocurrency market. Despite the FCA’s efforts, many unauthorized promotions remain visible, exposing consumers to potential scams and financial losses.
As the UK intensifies its regulatory efforts, including stricter ad policies from platforms like Google, the challenge of curbing illegal crypto ads persists. The FCA’s warnings and actions serve as a reminder for consumers to prioritize dealing with FCA-approved entities to safeguard their investments.
