A number of cryptocurrency firms operating in the U.K. are rolling risk assessments ahead of new rules set out by the Financial Conduct Authority (FCA) expected to begin on Monday, January 8th.
Key players take action
So far, key crypto players such as Coinbase, Gemini, and OKX have all implemented their own financial surveys in the hopes of adhering to the new FCA guidelines.
In part, the questionnaires attempt to gauge investment information regarding the user’s own financial background and the extent to which they understand the risk of volatility when investing in cryptocurrency.
“The assessment is designed to test that you have sufficient knowledge and experience of the specific type of service or crypto assets being promoted, and to ensure you understand the risk,” read a January 2024 statement from OKX. “In line with these new requirements, those unable to complete the questionnaires or demonstrate a grasp of the risks will become ineligible to hold an OKX account.”
The FCA cracks down on crypto
The FCA took stringent action against any potential illicit activity in the crypto industry in 2023, setting forth a sweeping set of rules that banned certain crypto firms from providing certain incentive offerings like refer-a-friend bonuses and mandating “clear, fair and not misleading” across crypto asset firms.
“From this October, crypto firms must market to UK consumers clearly, fairly and honestly,” said Director of Consumer Investments for the FCA, Lucy Castledine, in a July 2023 statement. “And they must provide risk warnings people understand.”
Following the news, OKX reduced their token offerings to around 40 assets and put in place several warnings that warn customers of the “high-risk” nature of crypto investing, with one warning reading customers should not “invest unless you’re prepared to lose all the money you invest.”
Similarly, Binance launched a new domain in partnership with Rebuildingsociety.com to comply with the updated Financial Promotions Rules. However, the partnership was suspended shortly thereafter due to the FCA placing additional regulations on the peer-to-peer lending platform.
Users struggle to comply with regulatory requirements
Since the risk assessments rolled out, users across crypto exchanges have since taken to social media to express their disease while trying to comply with the requirements.
“I’ve been trying to do this for 36 hours,” one Coinbase user wrote to the company on X. “Why on earth have you stressed how important it is then hidden it in the app?”
“Finally passed the @Coinbase knowledge questionnaire after three tries to resume/unlock the ordering feature in my account,” another X user wrote.
It remains to be seen what, if any, additional regulations the FCA will put in place in regards to cryptocurrency in 2024.
Source: Pixabay / RGY23
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