{"id":37960,"date":"2023-07-19T23:36:00","date_gmt":"2023-07-20T03:36:00","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/crypto-memes-could-violate-financial-promotion-rules\/"},"modified":"2023-07-19T23:36:03","modified_gmt":"2023-07-20T03:36:03","slug":"crypto-memes-could-violate-financial-promotion-rules","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=37960","title":{"rendered":"Crypto Memes Could Violate Financial Promotion Rules"},"content":{"rendered":"
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Crypto memes may amount to criminal offenses if they don\u2019t comply with existing financial promotion rules, warned the United Kingdom\u2019s top financial regulator on Monday.\u00a0<\/p>\n

A newly proposed set of guidelines<\/u> from the Financial Conduct Authority (FCA) highlighted how \u201cany type of communication\u201d can be considered a financial promotion, and subjected to Section 21 of the Financial Services and Markets Act. The rule states that a person cannot, in the course of business, invite or induce others to engage in investment activity.\u00a0<\/p>\n

The ruling, according to the regulator, extends to memes. \u201c We have seen memes and other similar communications circulated on social media with users often not realizing they are subject to our rules,\u201d wrote the FCA. It added:<\/p>\n

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\u201cThe use of memes in promotions is particularly prevalent in the crypto asset sector.”<\/p>\n<\/blockquote>\n

As an especially popular asset class with young people<\/u>, memes are arguably central to how large swaths of the industry \u2013 including its community and businesses \u2013 relate to each other online.\u00a0<\/p>\n

In fact, major cryptocurrencies have popularized around little but the notoriety of the meme they represent \u2013 such as Dogecoin (DOGE)<\/u>, which is currently the 9th largest crypto by market cap.<\/p>\n

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Another Dogecoin-inspired cryptocurrency \u2013 Floki (FLOKI)<\/u> \u2013 ran advertisements for its coin on London public transport back in 2021, which were later banned by the Advertising Standards Authority (ASA). However, the FCA had previously warned that it would need new authorities from policymakers before it could independently go after such ad campaigns.\u00a0<\/p>\n

Non-Compliant Crypto Memes: A Sample<\/h2>\n

In its report, the FCA provided an example of a non-compliant crypto ad, which encourages viewers to spend their euros on crypto instead of groceries.\u00a0<\/p>\n

\u201cCryptoasset firms should also be aware that we have published final rules and proposed guidance on how the financial promotion rules apply to them and what they should be considered when communicating financial promotions,\u201d clarified the FCA.\u00a0<\/p>\n

Crypto firms like Coinbase have previously credited U.K. regulators with providing far more legal clarity on how industry firms can comply with the law compared to their U.S. counterparts. Faced with a lawsuit from the Securities and Exchange Commission, Coinbase CEO Brian Armstrong has shown consideration<\/u> for moving headquarters to the U.K. if it can\u2019t find legal footing at home.\u00a0<\/p>\n

Last month, lawmakers in the country passed<\/u> the Financial Services and Markets Bill, granting regulators authority to develop a tailored framework for digital assets.\u00a0<\/p>\n<\/p><\/div>\n