From Meme to Prison: The Unforeseen Consequences
The UK’s financial watchdog, the Financial Conduct Authority (FCA), has cautioned that cryptocurrency memes breaching financial promotion regulations may potentially lead to criminal penalties.
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In a set of proposed guidelines revealed on Monday, the FCA included a section focused on cryptocurrency memes deemed non-compliant as financial promotions.
The FCA expressed concern over memes and related content circulating on social media, with users frequently being unaware that these posts are governed by the authority's rules. To adhere to promotional regulations, memes deemed to be promoting cryptocurrencies might require disclaimers.
The FCA asserted that any communication can constitute a financial promotion under the Financial Services and Markets Act 2000's S21 provision. Violating S21 can lead to criminal penalties, including up to two years of jail time, unlimited fines, or both.
The updated guidelines are anticipated to have notable implications for meme coin projects, which often derive a significant portion of their value propositions from associated memes.
Furthermore, the consultation paper proposed rules targeting financial influencers on social media, who may unintentionally be promoting financial products without realising they are subject to S21 restrictions.
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