Many cryptocurrency firms in the U.K. are preparing for new rules set to take effect on Monday, January 8th.
The Financial Conduct Authority (FCA) is expected to begin enforcing these rules, which are designed to protect consumers and prevent money laundering.
Among the new regulations is a requirement that firms conduct risk assessments to identify and mitigate any potential risks.
Crypto exchanges Coinbase, Gemini, and OKX are all in the process of implementing new financial surveys in order to adhere to the new FCA guidelines.
These surveys will help the exchanges better understand their customers and their needs. This will, in turn, help the exchanges provide a better service and experience for their customers.
Questionnaires for gauging investment information are being handed out to users, in an attempt to better understand the risk of volatility when investing in cryptocurrency.
This information is being gathered for those who have a financial background, as well as those who understand the volatility risks associated with digital currencies.
Key players take action
Coinbase, Gemini, and OKX are all key players in the crypto world, and they are all implementing their own financial surveys in order to adhere to the new FCA guidelines. By doing this, they hope to create a more regulated and secure crypto industry.
In part, the questionnaires are designed to gauge your understanding of cryptocurrency investment risk and your own financial background.
In order to comply with new regulations, starting in January 2024, OKX will require all account holders to complete questionnaires and demonstrate a grasp of the risks associated with the specific type of service or crypto assets being promoted.
Those who are unable to meet these requirements will be ineligible to hold an OKX account.
The FCA cracks down on crypto
FCA’s comprehensive crackdown on illicit activity in the crypto industry in 2023 led to a number of sweeping changes, including a ban on certain types of incentive offerings like refer-a-friend bonuses, and a mandate for “clear, fair and not misleading” communication across crypto asset firms.
Crypto firms will need to market their products clearly and fairly to UK consumers from this October, as well as providing risk warnings that people can understand, according to Director of Consumer Investments for the FCA, Lucy Castledine, in a July 2023 statement.
OKX has reduced their token offerings to around 40 assets and put in place several warnings that warn customers of the “high-risk” nature of crypto investing. One warning reads customers should not “invest unless you’re prepared to lose all the money you invest.”
Binance has been on a bit of a roll lately. Just a few weeks ago, they announced the launch of a new domain in partnership with Rebuildingsociety.com.
The idea was to create a more compliant platform in light of the updated Financial Promotions Rules. However, the partnership was suspended shortly thereafter due to new regulations placed on the peer-to-peer lending platform by the FCA.
Users struggle to comply with regulatory requirements
Since the risk assessments rolled out, users across crypto exchanges have taken to social media to express their disdain for the new requirements.
Some have even joked about the whole ordeal, posting memes and GIFs about the situation. Others have been more vocal in their criticism, saying that the new measures are pointless and only serve to create more work for everyone involved.
Coinbase user X has been struggling to complete a task on the app for 36 hours. They reached out to Coinbase to express their frustration, questioning why the company had stressed the importance of the task if it was hidden in the app.
“Finally passed the @Coinbase knowledge questionnaire after three tries to resume/unlock the ordering feature in my account,” another X user wrote.