U.K.'s FCA is concerned about the poor quality of responses it has received from unregulated overseas crypto firms about the upcoming promotions regime for the sector, officials at the regulator told CoinDesk.
The regulator seemingly welcomed announcements from firms like ByBit, Luno and PayPal that they were halting certain services to comply with the new rules.
Some foreign crypto firms have responded poorly to the U.K. Financial Conduct Authority's attempts to engage them about its upcoming promotions rules for the sector, officials at the regulator said during a Monday interview with CoinDesk.
The promotion rules requiring crypto firms to have appropriate warnings on websites and implement a 24-hour waiting period for new investors to confirm they want to enter into a contract with companies will take effect on Oct. 8. The regulator has also given firms the option of applying for a three-month extension to comply with the rules.
While the FCA has tried to engage crypto firms serving U.K. clients about the promotions regime, it's "concerned about a lack of engagement from some unregulated overseas firms,” said Lucy Castledine, director of consumer investments at the regulator.
"There are some [overseas firms] that have not engaged to the standard that we would expect and the provision of information back to us has been poor,” she added.
Conversely, crypto firms like ByBit, Luno and payments platform PayPal, who recently announced they were halting certain services to the U.K. market in order to comply with the rules, received a nod of approval from the watchdog.
“You will appreciate we can't comment on specific firms but what we can say is that, of course, where firms are making decisions to actually get to the standards we want to see, that's really positive,” said Matthew Long, director of payments and digital assets at the FCA.
Meanwhile, the regulator is prepared to monitor firms' compliance and has the ability to scan 100,000 websites on a daily basis, said Castledine.
When firms don't comply, “we will issue warnings against those particular firms. We also have the ability to issue takedown requests ... and we've been working with the other big online tech platforms to make sure that illegal promotions don't actually appear in the first place,” Castledine said, adding that companies like Google are working to ensure paid financial promotions comply with FCA rules.
Unauthorized ads or promotions could mean jail time, the FCA warned in February.
The regulator will also have powers against overseas companies serving U.K. clients without registering with the FCA, but how they will handle them will vary case by case Castledine added. The regulator submits information on non-compliant firms to global watchdogs like the International Organization of Securities Commissions (IOSCO) to be added to alert lists, she said.
“That international response is quite key and quite critical for us and we're working very hard on those relationships,” Castledine said.
Read more: UK Crypto Incentives Ban Could Drive Firms Out of Country, Lobbyists Say
