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The UK’s Financial Conduct Authority (FCA) Identified A new area of potential regulatory concern is cryptocurrency memes. Financial watchdogs have warned that non-compliant cryptocurrency memes not only violate financial facilitation rules, but can also lead to crime.
Too many people across the UK receive financial promotion from inappropriate sources.
— Financial Conduct Authority (@TheFCA) July 17, 2023
In a set of new guidelines proposed on July 17, the FCA cited a meme that contrasted the pain of spending traditional money with the ease of trading cryptocurrencies. The agency considers such memes to be potentially misleading, and any form of communication may fall under the Financial Promotion Regulations, specifically Section 21 of the Financial Services and Markets Act 2000. Companies are being alerted to the fact that
“The use of memes in promotion is particularly prevalent in the crypto space. Figure 7 is an example of a crypto meme subject to the Financial Promotion Scheme.”
The law outlines criminal penalties for violations, including up to two years in prison, unlimited fines, or both. The point is that “any financial promotion coming from outside the UK that could have an impact within the UK falls within the scheme.”
These guidelines were published on July 5, and said companies promoting cryptocurrencies have until October 8, 2023 to change their messaging or obtain regulatory approval.
Memecoin’s efforts, which rely heavily on memes for promotion, could be affected. To comply with advertising regulations, it may be necessary to incorporate a disclaimer into your meme.
Another target of the new FCA guidelines is social media ‘fluencers’, i.e. individuals who promote financial products, especially investment and credit products, through social media platforms.
The FCA recognizes that Finfluencers, especially those active on platforms such as Reddit and Telegram, may violate restrictions on financial advertising, regardless of whether direct compensation or explicit commercial interests are involved. revealed to be sexual.
“We want our unauthorized influencers to think carefully before promoting financial products and services and understand their obligations when advertising through social media channels. FCA Advertisement of regulated financial products and services without the authorization of an authority, or provision of financial advice without the approval of the FCA, can be criminal offences.”