LONDON, Jan 19 (Reuters) – Britain’s financial watchdog said on Wednesday it planned to curb the marketing of cryptoassets and other high-risk investments, a move that comes amid a boom in crypto ads and endorsements from celebrities.
The changes would strengthen risk warnings on ads and ban incentives to invest, such as new joiner or refer-a-friend bonuses, the Financial Conduct Authority (FCA) said.
A surge in investment scams, particularly online and via social media since the coronavirus pandemic began in 2020, has prompted the regulator to take action, such as refusing one in five licence applications from consumer investment firms in the year ended March 2021.
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“We are concerned that too many consumers are just ‘clicking through’ and accessing high‑risk investments without understanding the risks involved,” the FCA said.
The planned rules cover high-risk investments such as cryptoassets, including cryptocurrencies such as bitcoin, as well as crowdfunding, peer-to-peer agreements, mini-bonds and speculative illiquid securities.
The FCA move comes as interest in digital currencies has surged. Across the world, a growing number of celebrities have promoted crypto companies online, with some getting into trouble as a result.