UK Struggles to Control Illegal Crypto Ads Despite FCA Crackdown
Despite FCA's crackdown, only 54% of illegal crypto ads in the UK were removed in 2024, raising concerns over enforcement and regulatory effectiveness.
Illegal cryptocurrency advertisements continue to spread across the UK despite efforts by the Financial Conduct Authority (FCA) to curb them. Between October 2023 and October 2024, the FCA issued 1,702 requests to remove unlawful crypto ads, yet only 54% of these were acted upon, leaving nearly half of the promotions untouched.
The FCA introduced stricter rules for crypto advertisements in June 2023, highlighting the risks associated with the crypto market. According to these guidelines, only FCA-authorized promotions are allowed in the UK. Non-compliance could result in severe penalties, including up to two years in prison, unlimited fines, or both. The FCA warned it would take firm action, such as blacklisting firms, blocking illegal ads, and initiating enforcement measures. Despite these warnings, the FCA has yet to penalize firms that ignore its orders, raising doubts about its ability to deter violations effectively.
Former FCA chair Charles Randell expressed frustration over the high level of non-compliance, emphasizing the importance of penalizing companies that fail to follow the rules. The lack of enforcement undermines efforts to protect consumers from high-risk investments that may not align with their risk tolerance. The regulator aims to ensure that promotions are clear and do not mislead the public, but the failure to act on noncompliance remains a significant issue.
While some companies, like Binance and Solana’s Pump.fun, have responded to FCA warnings by ceasing operations in the UK or restricting access, many others continue to flout the rules. Pump.fun, for example, blocked UK users after being flagged as unauthorized by the FCA in December 2024, while Binance stopped onboarding UK clients in 2023 after deregistering with the regulator.
The FCA is also working to develop comprehensive crypto regulations, expected to be finalized by Q1 2026, focusing on areas such as market abuse, trading platforms, lending, and stablecoins. However, the regulator's limited success in removing illegal promotions suggests a need for a stronger approach. Despite promises of "robust action," the FCA has yet to demonstrate significant progress in addressing the issue.
The FCA’s inability to enforce penalties has allowed illegal ads to persist, raising concerns about consumer protection. The Financial Times highlighted the disappointing results of 2024, showing that the current strategy may need significant adjustments to ensure compliance. The regulator’s efforts to remove misleading content remain crucial in safeguarding investors, but achieving this goal requires both stricter enforcement and follow-through on promised penalties.
As crypto markets grow, the need for effective regulation becomes even more pressing. The FCA’s performance in 2024 suggests that without intensified action, illegal promotions will continue to pose risks to UK consumers. The upcoming regulatory framework provides an opportunity for the FCA to enhance its oversight and take decisive steps to address noncompliance in the crypto industry. It remains to be seen whether these measures will lead to meaningful changes or if the regulator will continue to face challenges in its efforts to control the market.
