Financial promotions and cryptoassets


INSIGHT
Published
Aug 8th '19
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On 31 July 2019, the Financial Conduct Authority (FCA) published final guidance on cryptoassets in its Policy Statement PS19/22 to provide a better protection to market participants.

 

Section 21 of FSMA provides that a person must not, in the course of business, communicate an invitation or inducement to engage in investment activity unless that person is an authorised person or the content of the communication is approved by anauthorised person. Issuing a financial promotion in breach of section 21 FSMA is a criminal offence.

 

The FCA expect market participants to apply the financial promotion rules and communicate financial promotions for products and services, whether regulated or unregulated, in away which is clear, fair and not misleading. It is a legal requirement that firms make clear in their promotions which activities are, and are not, regulated, especially when highlighting their FCA authorised status. For example, an authorised firm may decide to offer access to unregulated cryptoassets (such as exchange tokens, like Bitcoin or Ether). The firm must not, in any way, communicate that their authorisation extends to those unregulated cryptoassets, and communication should be transparent to ensure consumers are aware which activities the firm is authorised for.

 

Investing in, for example Bitcoin, be prepared that there is no fundamental value and the investment will go up or down. It’s possible its value could fall to zero making it worthless.

 

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