British Ministry of Finance wants to act hard against misleading crypto actions

The British Ministry of Finance has submitted plans to change the law to improve consumer protection and to put advertising for the rapidly growing crypto industry under the same standards as other types of financial products.

In a statement on Tuesday, Rishi Sunak, British Chancellor said that crypto-assets could offer people new opportunities for transactions and investments, "but it is important that consumers do not sell products with misleading claims".

The proposals underline an increasing trend among regulatory authorities worldwide to tighten advertising standards while struggling with how a rapidly growing global industry should be regulated.

Spain this week imposed restrictions on the promotion of cryptocurrencies, while the Italian supervisory authority also warned of risks for consumers who had little financial knowledge.

The British suggestions come after the government started an industry consultation for crypto advertising in the summer of 2020. Since then, the price has been shot up to popular crypto-assets such as Bitcoin and Ether and hundreds of new digital tokens have been introduced. Last year, the British market supervisory authority estimated that 2.3 million people in the country had some crypto-assets.

The Ministry of Finance said that it would bring crypto advertising into the scope of existing legislation that covers financial advertising actions, which says that "financial advertising campaigns must be fair, clear and not misleading".

So far, the responsibility for crypto advertising was largely with Advertising Standards Authority. Adding an FCA supervision represents a great tightening of the rules, since the powers of the ASA are generally limited to subsequently examined ads instead of requesting prior approval. The FCA can also impose fines for serious violations of their standards.

Last month, the ASA blame seven crypto groups because of a variety of advertising campaigns, including online campaigns and the use of social media influencers, and said "something has to change quickly in the online area".

advertising campaigns for cryptoma coins and services in public transport in London have attracted special attention and asked for a ban from some elected officials.