The Treasury introduced new legislation to address deceptive crypto-asset advertising.

Although 2.3 million people in the United Kingdom possess crypto assets, the government is concerned that some buyers may be unaware of what they are purchasing.

Bitcoin and other crypto-assets are highly unregulated, and investors lack numerous protections.

Similarly, non-fungible tokens are not covered by the new restrictions.

Exaggerate the benefits

The government intends to pass legislation that will subject "qualified crypto-assets" to the same Financial Conduct Authority (FCA) requirements as other financial marketing, such as those for stocks, bonds, and insurance products.

According to a 2018 report by the Crypto-assets Taskforce, which includes the Treasury, the Bank of England, and the Financial Conduct Authority, crypto advertising frequently exaggerates benefits and rarely warns customers about the risk of losing their investment.

The FCA's subsequent research indicated that public knowledge of crypto-assets was deteriorating even as more individuals invested.

Chancellor Rishi Sunak stated that the new regulations would safeguard consumers "while simultaneously fostering innovation in the crypto-asset market."

"Crypto-assets can open up fascinating new avenues for people to interact and invest - but it's critical that customers are not misled by false claims," he said.

Speculation in finance

The government has stated that it is still working on defining the crypto-assets that would be covered by the new legislation.

However, it will exclude non-fungible tokens.

NFTs are frequently used as a method of digital receipt and for the exchange of digital art or "collectibles."

Several of the most precious items are up for sale for millions of pounds.

And the authorities confirmed that many were exchanged in speculative financial markets.

However, it noted that "new sorts of non-fungible tokens have appeared, blurring the line between financial services and digital collector items."

Furthermore, "the government's objective was not to apply financial promotion regulation to non-financial products."

The Treasury, on the other hand, stated that it will closely watch the situation.

'Priority red alert'

The FCA is not the only regulatory body concerned with cryptocurrency advertising.

The Advertising Standards Authority has declared that monitoring crypto-assets such as Bitcoin is a "red-alert priority," in response to concerns that many advertisements do not adequately represent the risks associated with investing.

It has prohibited various crypto-asset promotions, including those from a pizza company and a sports club, and is developing new criteria for advertisers.

Regulators are also taking action on a global scale.

According to Reuters, the Spanish National Securities Market Commission has established new rules governing crypto-asset advertising, including promotions by social media influencers.

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