UK dodges ‘US malaise’ as regulator finalizes crypto rules

The Financial Conduct Authority (FCA), the UK’s primary financial regulator, has officially finalized its regulatory framework governing the promotion and marketing of crypto assets, a move that industry experts believe shields the nation from the regulatory instability currently characterized in the US market.

Effective immediately, the new rules mandate that crypto firms promoting their services to UK consumers must adhere to the same stringent advertising standards applied to traditional financial services. This includes requiring firms to be authorized or to market through an authorized entity, providing clear risk warnings, and ensuring that communications are fair, clear, and not misleading. Crucially, the FCA has classified many crypto marketing efforts as ‘high-risk investments,’ subjecting them to a four-stage phased implementation of rules designed for consumer protection.

This decisive action stands in stark contrast to the United States, where the crypto industry continues to struggle under what many executives have termed ‘regulation by enforcement.’ The US environment is marked by ongoing legal battles between the Securities and Exchange Commission (SEC) and major crypto exchanges, alongside a persistent lack of congressional clarity on whether digital assets should be classified as securities or commodities. This fragmentation and enforcement-heavy approach have been blamed for driving significant blockchain innovation and talent away from US shores.

By integrating crypto asset regulation directly into existing financial legislation (specifically, the Financial Services and Markets Act), the UK aims to provide a predictable and stable operating environment. This approach is anticipated to attract legitimate crypto businesses seeking regulatory certainty, cementing the UK’s position as a compliant, yet innovative, global financial hub, and successfully sidestepping the regulatory ‘malaise’ currently hindering growth across the Atlantic.

Source: UK dodges ‘US malaise’ as regulator finalizes crypto rules