The Treasury has proposed bringing the promotion of cryptoassets under the scope of the Financial Conduct Authority (FCA).
Economic secretary to the Treasury John Glen said the promotion of cryptoassets is currently unregulated but their proliferation and the fact they are often targeted towards retail investors has created more risks.
The government has launched two consultations.
One proposes that an unauthorised person selling cryptoassets must have its financial promotions approved by an authorised person before they are communicated.
Read more: FCA outlines approach to cryptoassets
Separately, the government is consulting on proposals to strengthen the FCA’s ability to ensure the approval of financial promotions of unauthorised firms operates effectively.
In that consultation, the government proposes to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms.
Any firm wishing to approve the financial promotions of unauthorised firms would first need to obtain the consent of the FCA.
“It’s important that people can understand the financial products they see promoted,” Glen said.
“If adverts by unauthorised firms are misleading, or don’t fully outline the risks, then people can end up losing money.
“That’s why we want to put more protections in place around such financial promotions, including the promotion of cryptoassets, while continuing to ensure people have access to a wide range of products on the market.”
Both consultations close on 26 October.