After the watchdog announced plans to take control of cryptocurrency advertising, misleading ones will be dealt with.
The Mail on Sunday has been warning for months of the dangers of some of the adverts, which can lead investors to take on more risk than they realise.
The Financial Conduct Authority has now made a decision: Cryptocurrency ads will be treated the same as any other financial promotion.
Last year, the number of UK customers holding cryptocurrency increased to 2.3million. This is in spite of a growing understanding of their workings. Adverts for cryptocurrencies will be treated in the same way as other financial promotions, the Financial Conduct Authority now says.
This will remedy the contradiction whereby adverts for regulated financial products faced tighter rules than high-risk, unregulated cryptocurrencies. Also, FCA announced that they are looking at replacing the exaggerated ‘your capital may be at risk’ warning in adverts with better wording.
In a study, it compared the effectiveness of this standard warning with others such as: ‘This is a high risk investment. If something happens, you could end up losing all of your investment.
This study showed that messages that are clearly visible and designed with investors in mind, such as risk warnings, were more effective.