The cryptocurrency exchange OKX is introducing rules for its United Kingdom-based users in response to recent regulations introduced by the UK Financial Conduct Authority (FCA).
On January 2, OKX announced changes to its user experience for new and existing retail users in the United Kingdom (UK) in response to newly implemented crypto marketing regulations as the country pushes for greater industry oversight. The changes will be effective on January 8, 2024.
Starting next week, both new and existing UK customers will be required to complete an investor questionnaire to demonstrate their understanding of the risks associated with buying and trading digital assets.
Additionally, users must undergo a second questionnaire to evaluate whether investing in cryptocurrencies is suitable for them. Those who are unable to complete the questionnaires or demonstrate a sufficient understanding of the risks will no longer be eligible to hold an OKX account.
These changes are in response to the FCA’s recent efforts to promote responsible trading and ensure users are aware of the risks associated with crypto trading.
In October, the FCA implemented some new rules pertaining to digital assets, which require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
Key updates from the FCA’s rule include exchanges providing clear warnings to customers about the risks associated with crypto investments. Also, the marketing materials must be fair, transparent, and not misleading. Additionally, a 24-hour cooling-off period for new customers is required.
In response to these, the exchange further emphasizes the importance of making users aware of the risks and tradeoffs associated with crypto trading, bringing the industry closer to traditional financial norms.
OKX stated its dedication to responsible trading practices and alignment with regulatory measures designed to inform users about the inherent risks and tradeoffs in cryptocurrency trading. The company views this as a pivotal opportunity to educate users on the significance of thorough research, well-defined trading plans, the assessment and mitigation of counterparty risks, and the implementation of effective risk management practices.
In line with its commitment to responsible trading, OKX places significant emphasis on the tagline “Trade responsibly.” The company regards this not merely as a slogan but as a mission to actively educate customers about the best practices associated with responsible trading.
Notably, OKX’s disclaimer reads:
“Don’t invest unless you’re prepared to lose all the money you invest. Cryptocurrency is a high-risk asset, and you should not expect to be protected if something goes wrong.”
FCA’s Final Warning Spurs Compliance Efforts: Binance and OKX Adjust Operations Ahead of UK Crypto Regulations
Out of the 150 firms invited to participate in an undisclosed survey by the FCA, only 24 had responded as of last year September, prompting the regulator to issue its final warning to various stakeholders.
In October of last year, unregistered crypto firms were mandated to cease any illicit financial promotions aimed at UK consumers. While authorized entities can legally communicate financial promotions to UK consumers, failing to comply may result in a potential two-year prison sentence.
The FCA regulations, set to take effect on January 8, 2024, have prompted cryptocurrency exchanges like Binance and OKX to comply with new rules.
Binance, for instance, launched a new domain for UK users and partnered with the local peer-to-peer lending platform Rebuildingsociety. However, Binance halted the onboarding of new UK users on October 16, following additional restrictions imposed by the FCA on Rebuildingsociety.
Meanwhile, ByBit has opted to halt its services in the UK indefinitely, taking a proactive stance to comply with regulations and avoid potential conflicts with the regulatory authorities.
Similarly, in August, PayPal announced a “temporary pause” on crypto purchases for its UK users, citing regulatory considerations. The company plans to review this decision at a later date, which is expected to be sometime this year.
OKX has reduced its token offering to around 40 assets and adopted prominent risk warnings on its interface to align with upcoming FCA regulations.
