The U.K.’s financial watchdog is launching a crackdown on cryptocurrency companies that violate new standards.
The Financial Conduct Authority (FCA) is set to begin updating its warning list of violators on an hourly basis and publishing the names on its website, Lucy Castledine, the FCA’s director of consumer investments, told Bloomberg on Saturday (Oct. 7), one day before rules went into effect.
The requirements mandate that crypto promotions must be “clear, fair and not misleading,” and companies must offer a 24-hour cooling off period for customers to rethink purchases.
The FCA has argued that crypto assets remain high risk, and warned consumers they are unlikely to be compensated by the government if they lose their funds.
“We have repeatedly warned that consumers should be prepared to lose all of their money if they buy cryptoassets,” the authority said earlier this year. “Recent events such as the high-profile failure of several crypto-asset firms further highlight the riskiness of these products.”
Castledine told Bloomberg the FCA will scrape around 100,000 websites each day in search of breaches and then turn over names to international regulators. The FCA will also work with major tech companies to take down noncompliant apps and websites.
“There are a significant number of firms who we don’t think we’ll be able to meet the new requirements,” Castledine said, but declined to specify which companies. “There are a number of fairly large overseas crypto exchanges that are targeting the U.K. that have failed to engage with us.”
The report notes that failure to comply with the rules could subject violators to prison time or unlimited fines. The FCA last month offered some firms an extension until January to comply with the rules. However, this only applied to companies that were already registered with the FCA or eligible to apply through an authorized approver.
This year has seen a number of financial institutions in England tighten limits on retail customers’ access to cryptocurrency.
Last month, Chase UK told customers that it would forbid them from making cryptocurrency transactions to protect them from the rising number of frauds and scams associated with crypto.
The bank told customers it will implement the measure beginning Oct. 16, according to a statement shared with PYMNTS.
“To help keep your money safe from frauds and scams, we’re changing the types of payments you can make from Chase,” the bank said in its email to customers. “From 16 October 2023, if we think you’re making a payment related to crypto assets, we’ll decline it.”
