UK FCA set to bring in ‘cooling-off period’

The UK’s Financial Conduct Authority (FCA) will introduce a cooling-off period for first-time investors from 8 October this year.

‘Refer a friend’ bonuses are also set to be banned under the new crackdown.

The FCA say the measures are drafted to make sure people fully understand what’s truly involved when they invest in crypto.

The regulator adds that those promoting crypto must also state the risks involved to “ensure adverts are clear, fair and not misleading”. 

The FCA’s new regulations follow UK government legislation to bring crypto promotions under the spotlight.  

“It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice,” said Sheldon Mills, FCA executive director, consumers and competition.  

“Consumers should still be aware that crypto remains largely unregulated and high risk. Those who invest should be prepared to lose all their money.

“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”

The FCA also says that crypto ownership has more than doubled in the UK from 2021 to 2022, with 10% of the 2,000 people they surveyed saying that they own crypto.  

The latest crackdown follows a tough week for crypto following the SEC’s legal action against the Coinbase and Binance exchanges.

At the time of writing, the price of Bitcoin is trading at $26,393.14, down 0.72% in the past day, while the global crypto market cap is worth $1.1T, a drop of 0.93% according to CoinMarketCap.