LONDON (Reuters) -Britain’s Financial Conduct Authority said its tougher rules on marketing cryptoassets would come into force in early October, but added on Thursday that firms could apply for more time to comply with some elements such as a 24-hour cooling off period.
The FCA said in a statement that the new rules apply to firms marketing cryptoassets to consumers in Britain, wherever the firms are based globally, and help strengthen how people are protected from the high risks associated with them.
“We are concerned by the failure of many overseas and unregulated crypto firms to engage with us on the new rules,” Lucy Castledine, FCA director of consumer investments, said.
“We will be taking action against firms illegally marketing to UK consumers,” Castledine added of the rules which are due to come into effect early next month.
Breaches of the new rules, which aim to make marketing of cryptoassets clearer and more accurate and ban incentives like ‘refer a friend’ bonuses, could be punished by an unlimited fine or up to two years in prison.
The watchdog reiterated that cryptoassets are high risk and buyers should be prepared to lose all their money.
It said firms could be given until Jan. 8, 2024 to introduce “features that require greater technical development”, while the core rules will come into effect from Oct. 8 this year.
“Firms must first apply for the flexibility which would then allow them time to make the required back-office changes successfully,” it added.
(Reporting by Huw Jones; Editing by Iain Withers and Alexander Smith)