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United Kingdom seeks to regulate crypto asset ads to protect consumers

By Rich Klein
United Kingdom seeks to regulate crypto asset ads to protect consumers
The Bitcoin logo is displayed on a screen in Times Square in New York when Coinbase Global began  trading at the Nasdaq on April 14. File Photo by John Angelillo/UPI | License Photo

Jan. 18 (UPI) -- The promotion of crypto assets in the United Kingdom may soon be regulated.

The HM Treasury announced plans Tuesday "to strengthen the rules on crypto asset advertisements and protect consumers form misleading claims."

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Rishi Sunak, chancellor of the Exchequer, said "cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest -- but it's important that consumers are not being sold products with misleading claims."

A government document outlining the plan noted that about 2.3 million people in the United Kingdom own a crypto asset. "But research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying," the Treasury said.

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The new rules would have to be approved by Parliament.

The promotion of qualifying crypto assets like bitcoin will be subject to Financial Conduct Authority rules "in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to," the Treasury said.

Revolut, a British firm that offers trading in cryptocurrency and stocks, welcomed the proposal.

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"Clear guidance in how companies describe their crypto offering will benefit consumers and help improve trust in the sector," Ed Cooper, Revolut's head of crypto, told CNBC. "Revolut continues to follow the financial promotions rules in its crypto communications."

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Britain's Advertising Standards Authority banned seven ads last month from companies including Coinbase and Papa John's, accusing them of exploiting "consumers' inexperience."

Most cryptocurrency transactions are focused on investment, speculation and trading, especially in portions of the world where people have lost faith in government currency.

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In the United States, Securities and Exchange Commission Chairman Gary Gensler last month said that the crypto asset market needs more investor protection.

"The public's anticipating some profit based upon the efforts of some entrepreneur or computer-science group that's raised money from the public," Gensler told The Wall Street Journal. "That fits in our broad remit at the SEC."

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