UK Bans Free Promotional NFTs, Crypto Airdrops
This week, the Financial Conduct Authority (FCA) of the UK announced stricter advertising guidelines for the cryptocurrency sector, which will go into effect on October 8. It will no longer be permitted to airdrop free NFTs and cryptocurrencies to entice people to invest in digital assets.
The FCA’s director of payments and digital assets, Matthew Long, told the media outlet CoinDesk that these NFTs and airdrops commonly lead to customers purchasing cryptocurrency they subsequently discover “can be problematic later.”
Long clarified that only promotions employing NFTs and airdrops would be prohibited.
According to the FCA’s recently released regulations, organisations offering crypto products or services must now include clear risk warnings and classify cryptocurrency as a “restricted mass market investment”. Additionally, the regulator announced that “refer a friend” bonuses that encourage the general public to invest in cryptocurrencies would be prohibited. For first-time investors, the new laws will mandate a “cooling-off” period in order to deter rash cryptocurrency purchases.
According to FCA research, the expected number of people who possess cryptocurrencies has more than doubled between 2021 and 2022, with 10% of the 2,000 respondents saying they do.
(With inputs from Shikha Singh)
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