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Senators and regulators explain why the $60 billion collapse of a major cryptocurrency is not the industry's Bear Stearns moment
There are more than 50 cryptocurrency companies that have been told they must stop promoting their products by the U.K.'s advertising watchdog as part of a regulation crackdown on advertising in this field.
It said Tuesday that the Advertising Standards Authority said that it has told the companies to look over their ads and make sure they are in line with all of the rules. It also said that if "problem ads" don't stop after May 2, it would punish businesses with specific sanctions.
This would include telling another regulator, the Financial Conduct Authority, about ads that don't meet rules.
Businesses should make it clear that digital assets are not regulated in the U.K. in a letter sent to them. Companies can't make people feel like they'll "miss out" on an investment in their ads, the ASA said.
This is what happened: The ASA didn't name the companies it has talked to, but it said that in the past, it has banned ads from Coinbase and Papa John's because it thought they misled people.
There are "red alert" issues for the ASA. "We've recently banned several crypto ads for misleading consumers and being irresponsible," the ASA said in a statement on Tuesday.
A tougher line is being taken by Britain when it comes to the crypto business. In January, the government said that crypto ads would be subject to the same rules as ads for other types of financial products. This would mean that advertisers in the industry would have to be approved by regulators.
Regulators also want to limit crypto ads so that only people who are rich or have a lot of money would be able to see them. This has been criticized by people in the industry.
An FSA consultation with the industry on how to regulate crypto ads is set to end on Wednesday.
An industry group called Global Digital Finance says it sent a letter to the UK's Finance Minister, Rishi Sunak, about some issues. Coinbase and Bitfinex are part of this body.
To avoid clogging the market and having unintended consequences, a new, custom-made law should be made, Global Digital Finance's director of government and regulatory affairs said in the letter.
"This regime would have rules about how cryptoasset promotions should be communicated, as well as rules about how cryptoasset firms should act and how regulators should supervise them."
As a separate thing, the deadline for crypto businesses to register with the FCA is set to expire on March 13. A lot of companies, like Revolut and Copper, could have to stop working in the UK if their application isn't approved in time.
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