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The UK Financial Conduct Authority has not penalized any company that has failed to remove illegal cryptocurrency advertisements, although half of the banned promotions remain online after the watchdog asked for them to be removed.
Only 54 percent of the 1,702 alerts were issued Financial Conduct Authority The period between October 2023 and October 2024 ended with the removal of illegal cryptocurrency ads, apps or websites, according to figures obtained through a freedom of information request.
The regulator could impose fines or bring criminal cases against groups that breach a new law aimed at cleaning up a wave of promotions of the UK's shady side. encryption Markets. The rules require cryptocurrency advertising to obtain a license from the Financial Conduct Authority (FCA) or an FCA-authorised company before putting it online – or face the watchdog promising “strong” action.
But the financial watchdog has not yet used any of the new powers, according to people familiar with its procedures. Instead, I focused on Targeting “influencers”financial influencers who promote such schemes online. A criminal case has been filed against nine people for allegedly promoting an unauthorized scheme linked to high-risk derivatives on Instagram, including TV stars who found fame on reality shows. Love Island and The only way is Essex. In October, the financial watchdog said it was interviewing 20 other influencers under penalty of warning for illegal promotion of financial services products.
People familiar with the process said it took a long time to prepare prosecutions and search fines. This is despite the agency bringing the charges against influencers just two months after the Financial Conduct Authority (FCA) issued rules on social media promotion in March.
The Financial Conduct Authority (FCA) has touted its large numbers of takedown alerts for cryptocurrency ads. But a monthly breakdown of the amount of content removed, and FCA requests to remove content, shows that around half of ads are consistently removed.
Charles Rundle, former head of the Financial Conduct Authority (FCA), said penalizing companies that refused to remove content was necessary to reduce the “extremely frustrating” level of non-compliance.
“Ultimately, unless there is a real and very present threat of clear legal action for both (tech) platforms and licensed crypto asset exchanges that make non-compliant announcements, we are unlikely to see any change,” he told the Financial Times.
Only tackling cryptocurrency scams by issuing alerts would help raise consumer awareness in the meantime, said Tom Foch of law firm Eversheds Sutherland – which obtained the data through a freedom of information request –.
The FCA does not have powers to require online platforms to remove unapproved content, relying instead on good faith negotiations with technology platforms.
The financial sector has expressed widespread frustrations with the inability of regulators to hold social media companies accountable for the financial misconduct that often arises from their services. Payments regulator He told FT In October, tech groups must do more to help.
“When platforms are passionate enough to block these ads, they can, and they will,” said Rundle, who resigned as FCA chief two years ago and now works as a consultant to law firm Slaughter & May. “Regulators – including the Financial Conduct Authority (FCA), Ofcom and, if necessary, criminal prosecution authorities – may need to ensure that platforms have this motive.”
The FCA persuaded technology groups including Google, Meta and Microsoft's Bing to block paid ads that had not been approved by an FCA-authorised group – but the agreements were voluntary.
The Financial Conduct Authority (FCA) said “good progress” had been made, but the regulator remained “concerned about the spread of online scams and scams”.
She added: “Many social media sites have now blocked paid advertising for financial services in the UK from non-FCA regulated firms, and we continue to (take) action against those we find breaching our rules.”
