The Financial Conduct Authority (FCA) of the United Kingdom warned that cryptocurrency memes may result in criminal crimes if they violate the laws governing financial advertising on Monday. The FCA’s recently released set of draft regulations made clear that “any type of communication” can be construed as a financial promotion and fall within the purview of Section 21 of the Financial Services and Markets Act. This regulation prohibits anyone from inviting or pressuring others to participate in investing activity while doing business.
Memes, particularly those pertaining to cryptocurrency, are not immune from these regulations, according to the FCA, which made this clear. The regulator took notice of the prominence of memes in the cryptocurrency asset market and voiced worry about users who could unintentionally break financial promotion laws by posting on social media.
Memes are becoming an essential component of communication in the bitcoin sector, particularly among younger people. Major cryptocurrencies, like Dogecoin (DOGE), which is presently the 9th biggest cryptocurrency by market capitalization, have become well-known due to the memes that are linked with it.
According to the source, in 2021, the cryptocurrency Floki (FLOKI), which was inspired by Dogecoin, aired adverts for its coin on London’s public transportation. The Advertising Standards Authority (ASA) subsequently prohibited these advertising. However, the FCA said that it would want fresh authorization from legislators before launching such advertising efforts on its own.
The FCA emphasized that they have released final regulations and suggested advice on how financial promotion laws relate to the sector in order to provide clarity to cryptoasset businesses. For financial promotions to be communicated in the proper way, adherence to these guidelines is crucial.
Crypto companies like Coinbase have applauded UK authorities for providing greater legal certainty than their counterparts in the US. In light of a lawsuit from the US Securities and Exchange Commission (SEC), Coinbase CEO Brian Armstrong has said that if the business has trouble establishing itself legally at home, it may move its headquarters to the UK.
The Financial Services and Markets Bill, enacted by UK MPs last month, gives authorities the power to create a specific framework for digital assets. This action is a key step toward improving regulatory control in the UK’s quickly developing bitcoin industry.