United Kingdom’s Financial Conduct Authority(FCA) will launch a digital marketing campaign worth £11 million to warn people about the risks associated with crypto investments. The regulator made its intentions known through a speech delivered by its chief executive at a webinar on Thursday.
UK FCA to Launch $15.2 Million Campaign to Warn Investors on Crypto Risks
During a webinar titled “Our Role and Business Plan”, FCA CEO, Nikhil Rathi announced that the agency is creating a $15.2 million(£11 million) fund to warn investors about the dangers associated with cryptocurrencies.
Explaining the need for such a campaign, Rathi stated that the UK has seen an explosion among younger people who are speculating and investing in high-risk assets. “This is a category of consumer that we are not used to engaging with – 18 to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an £11m digital marketing campaign to warn them of the risks,” he said. Rathi also pointed to a report published by the agency last year, which found that 2.5 million people in the country had invested in crypto assets.
According to the FCA chief, the GameStop episode is indicative of the fact that an increased number of investors are behaving less rationally and more emotionally. Additionally, he emphasized that the risks related to crypto are “stark” and as such “investors in crypto-assets should be prepared to lose all their money.”
The UK Steps Up Measures Against Misleading Crypto Ads
In the last few months, the UK has become progressively stricter on the operating standards of the crypto industry. Just a few days back, the country’s Advertising Standards Authority(ASA) identified promotions related to digital assets as a “red alert” priority, while vowing action against irresponsible and misleading crypto ads on social media and other online platforms.
So far, the independent advertising regulator has already ordered action against two crypto exchanges — Coinfloor and Luno.
However, as per a survey conducted by the FCA, ads have little impact on a crypto buyer’s decision-making process. But those who do base their investments on advertisements generally face worse outcomes.