Opinion: Embrace a gambling approach to crypto: Compliance tips for promotions in the UK
Disclaimer: The author’s views and opinions expressed in this article are solely their own and do not represent the views and opinions of crypto.news’ editorial team.
The UK Financial Conduct Authority (FCA) implemented new marketing regulations for cryptocurrency in October 2023. To engage in promotional campaigns in the United Kingdom, crypto businesses must obtain a license from the FCA or obtain specific authorization from the watchdog. Failure to obtain the necessary permissions for crypto advertising can have negative repercussions.
As a communications agency operating in the British market, we would like to offer recommendations on how to effectively engage with the media in this new environment. Drawing from my personal experience as a media relations specialist and incorporating insights from our legal experts, here are some suggestions.
Changes in the British Crypto Market
Cryptocurrency companies that target a British audience must adhere to the new FCA guidelines in the UK. Advertisements must be explicit, include prominent risk warnings, and avoid making exaggerated claims.
However, there is a catch. Crypto companies operating in the UK must either obtain an FCA license or enter into an agreement with a licensed advertising provider. Unfortunately, the rules for licensing crypto advertising providers have not yet been released. With the UK general elections approaching in the second half of 2024, there is a possibility of greater clarity regarding cryptocurrency regulation in the coming months.
Obtaining an FCA license is not a simple or quick process. Without a license, crypto projects may struggle to interact with the media in a way that protects their reputation and avoids being banned by the authorities.
Approval for Financial Promotions without a License
Starting from February 7, 2024, all companies registered outside the UK must apply for approval for their financial advertising campaigns. Businesses without an FCA license are considered “unauthorized persons” and require authorization to advertise to British audiences.
To learn more about the approval procedure, visit the official FCA website. Applying for authorization involves thoroughly reviewing existing norms and carefully preparing the application. However, this approval is unnecessary if you advertise your project through agencies with the necessary permissions.
How to Navigate the New Reality
First and foremost, it is crucial to adhere to the following principle in the new regulatory landscape: reach out to the media before launching a new promotional campaign and inquire about any changes to their policies. News outlets and PR agencies closely monitor regulatory changes and can provide guidance on appropriate language, necessary adjustments, and potential pitfalls. This way, you can launch an advertisement that fully complies with all guidelines.
Having previously worked as a CMO in a gambling media group, I understand the importance of communication with the media. When new regulations for gambling ads were introduced, our media had to address legal issues such as updating license codes and sales charts. All promotional articles went through lawyers, and the editor carefully reviewed client materials.
Our Approach to Compliant Ad Campaigns
The FCA requires crypto advertising to be “clear, fair, and not misleading.” The general guidelines closely resemble those used for regulating ads in high-risk activities such as gambling. Here are some principles we adhere to when creating promotional campaigns for crypto projects:
1. Bold risk warnings: We include clear risk warnings related to investing in crypto assets, highlighting high volatility, lack of regulation, and the potential for fraud.
2. Balanced presentations: We avoid overstating the potential benefits of crypto assets while downplaying the risks. Our presentations provide a balanced and objective view of investments.
3. Careful targeting: We aim to reach an appropriate audience that understands the associated risks. We avoid targeting vulnerable consumers and making misleading statements about the suitability of crypto assets for everyone.
4. Unambiguous language: Our messages are concise and easily understandable, avoiding jargon and technical terms that the target audience may not comprehend.
The FCA provides examples of good and bad practices in promoting crypto projects on its website.
Legal Perspective
Oleksandr Rudakov, Senior lawyer at SBSB Fintech Lawyers, recommends abandoning aggressive strategies in PR and advertising on UK channels. Instead, he suggests using classical organic PR and providing the media with valuable industry information while avoiding manipulative tactics. He also advises replacing traditional advertising with creative campaigns that resonate with the industry and cater to individuals unfamiliar with crypto. By prioritizing reputation, trust, and brand awareness, advertising can be a positive force.
Compliance with the New Rules for Safety
On October 10, 2023, just four days after the new regulations on crypto advertising and promotions came into effect, the FCA announced that Binance’s UK partner, Rebuildingsociety.com, could no longer approve crypto ads. In order to comply with advertising rules, Binance was compelled to stop accepting new UK users. Failure to comply with the new advertising guidelines can attract the attention of the FCA and result in the suspension of promotional activities. Adhering to the new rules is essential to avoid financial losses and successfully operate in the UK crypto market. It is important to work with licensed ad providers and prioritize clarity in promotional materials to maintain trust and credibility with regulators and consumers.
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Yely Kopan
Yely Kopan is a PR advisor and the director of public relations at INPUT Comms agency. She has a background in data analysis, journalism, TV show scriptwriting, marketing, and PR for media.
