The U.K. financial regulator, the FCA, has yet to penalize companies for failing to remove illegal cryptocurrency ads. Half of the banned promotions were still online after the FCA requested their removal.
According to data obtained through a freedom of information request, only 54% of the 1,702 alerts issued by the FCA between October 2023 and October 2024 resulted in the removal of illegal cryptocurrency ads, apps or websites. The regulator can impose fines or bring criminal charges against groups that violate the new laws. The relevant rules require cryptocurrency ads to be authorized by the FCA or an FCA-authorized business before they are published, otherwise they will face the "tough" action promised by the regulator.
But the FCA has not yet used any of its new powers, according to people familiar with its procedures, and is instead focusing on targeting "finfluencers," or financial KOLs who promote such schemes online. It has filed criminal charges against nine people, including TV stars known for reality shows Love Island and The Only Way Is Essex, for promoting unauthorised schemes on Instagram relating to high-risk derivatives.
In October, the FCA said it was interviewing a further 20 financial influencers who had been warned about illegally peddling financial services products.
Charles Randell, former FCA chairman, said penalising companies that refuse to remove content was essential to reducing non-compliance: “Ultimately, unless both these (tech) platforms and authorised crypto asset exchanges that post non-compliant ads face a very real threat of legal action, we are unlikely to see any change.”
It is understood that the FCA does not have the power to require online platforms to remove unapproved content, but relies on good faith negotiations with tech platforms.
Tom Fosh of law firm Eversheds Sutherland said that simply issuing alerts to combat cryptocurrency scams would still help raise consumer awareness. (FT)