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The UK’s financial watchdog is yet to fine any company that has failed to remove illegal crypto ads, despite half of all banned promotions remaining online after the watchdog asked them to be removed.
Only 54 percent of the 1,702 warnings he issued Financial Conduct Authority between October 2023 and October 2024, it ended up removing illegal crypto ads, apps or websites, according to figures obtained through a Freedom of Information request.
The regulator may fine or prosecute groups that breach the new law in a bid to clean up a wave of UK dark side promotions crypto markets. The rules require crypto ads to get authorization from the FCA or a company authorized by the FCA before being posted online — or face the watchdog’s promise of “strong” action.
But the FCA has yet to use any of the new powers, according to people familiar with its procedures. Instead, he focused on targeting “finfluencers”financial influencers promoting such schemes online. He launched criminal proceedings against nine people for promoting an unauthorized scheme linked to high-risk derivatives on Instagram, including reality TV stars Island of love and The only way is Essex. In October, the FCA said it was interviewing a further 20 financiers under caution for illegally advertising financial services products.
People familiar with the process said it took a long time to compile the prosecutions and research the fines. This is despite the agency bringing charges against financial influencers just two months after the FCA issued rules on social media promotions in March.
The FCA has touted its large number of takedown warnings for crypto ads. But an analysis of the amount of content removed by month and the FCA’s content removal requirements shows that around half of ads are being removed consistently.
The FCA’s former chairman, Charles Randell, said penalizing companies that refused to remove content was key to reducing the “very frustrating” level of non-compliance.
“Ultimately, unless a very real and present threat of legal action is apparent to both [tech] platforms and authorized cryptoasset exchanges issuing non-compliant ads, it is unlikely that we will see any change,” he told the Financial Times.
Tom Fosh of law firm Eversheds Sutherland – which obtained the data through an Access to Information request – said that dealing with “whack-a-mole” crypto scams solely by issuing warnings would still help raise consumer awareness in the meantime.
The FCA does not have the power to require online platforms to remove content that is not approved and instead relies on good faith negotiations with technology platforms.
The financial sector has expressed great frustration with regulators’ inability to hold social media companies accountable for the financial malfeasance that often stems from their services. Payment regulator he told the FT October that tech groups need to do more to help.
“When platforms are motivated enough to block these ads, they can and will,” said Randell, who stepped down as chairman of the FCA two years ago and is now a consultant at law firm Slaughter and May. “Regulators – including the FCA, Ofcom and, if necessary, law enforcement – may need to ensure that platforms have that motivation.”
The FCA persuaded tech groups including Google, Meta and Microsoft’s Bing to ban paid ads not approved by an FCA-authorized group – but the agreements were voluntary.
The FCA said “good progress” had been made but that the regulator remained “concerned about the prevalence of fraud and online fraud”.
It added: “Many social media sites have now banned paid ads for UK financial services from non-FCA authorized firms and we are continuing [take] actions against those we determine are violating our rules.”
