New UK regulations are cracking down on fraudulent cryptocurrency investment promotions, with the Financial Conduct Authority issuing 146 alerts on the first day of regulation.
The FCA warned consumers about companies offering cryptocurrency assets without regulatory clearance.
Despite pressure from a minister to be lenient with companies struggling to meet the demands of the new regulatory regime, the FCA took a tough stance.
The regulator estimated that 4.97 million British adults owned some crypto assets in August 2022 and warned that crypto remains largely unregulated and high risk.
Experts believe that better regulation will benefit investors who have put too much money into cryptocurrencies based on unrealistic expectations.
However, some critics argue that treating cryptocurrencies as regulated investments risks creating a “halo effect” that could encourage fraud.
Despite concerns, some cryptocurrency investment platforms have welcomed the tighter rules.