Thousands of advertisements for cryptoasset-related products were displayed on London public transport, including the underground network, in 2021. There has been a drop-off since the Advertising Standards Authority (“ASA”) issued standards for crypto adverts. Nonetheless, in 2022 there were reportedly adverts for 24 crypto products on London public transport. Now, however, legislation seems likely to end much of this public advertisement of crypto in the UK.
The new crypto financial promotion regime, which will come into force on 8 October 2023, will effectively only allow FCA-registered cryptoasset exchange and crypto wallet businesses, and FCA authorised financial services firms (e.g. asset managers), to make public cryptocurrency promotions (note that non-fungible tokens are excluded from the new rules). However, we expect that many authorised firms may not have the requisite expertise or want to assume the related risk. And the limited pool of FCA-registered crypto firms (around 40) will only be able to make their own promotions and will not be able to legitimise the crypto promotions of others by approval.
The toughening of sanctions also seems likely to have a chilling effect on public crypto advertising. ASA is a self-regulating organisation of the UK advertisement industry. The most likely sanction for breaches of its standards in relation to a crypto advertisement is currently a ruling that the advertisement must be taken down. However, under the new rules, the FCA, a regulator with considerably greater powers, may impose an unlimited fine, and breaches will be criminal offences.
It will be wise to mind the gap (between now and 8 October) and get prepared if you are directly impacted by this development. Otherwise, you can look forward to fewer crypto adverts in front of you on your journey into work.