David Ostojitsch, Director of Government Relations and Policy at PIMFA, commented: “While it is right that the Financial Conduct Authority (FCA) has sought to provide clarity around how crypto-assets are marketed - and where they fit in the financial promotions regime - we do have serious concerns around their classification as Restricted Mass Marketed Investments (RMMI).
“Classifying crypto-assets in such a way runs the risk of creating a ‘halo effect’ that may benefit some associated digital assets, leading consumers to assume they are safe assets to invest in or covered by some form of redress if consumers lose money. Neither is true.
“There is clearly a future role for crypto-assets, but only if they are marketed appropriately and to the right people. Crypto-assets are not regulated, are highly volatile and therefore high risk and should only be invested in by sophisticated investors that understand the risk they are taking, not mass market investors. There is a significant danger here that consumers will assume crypto-assets are safe because they are being marketed by an FCA-regulated person or firm. Again we would stress this is not the case.
“We are also disappointed that given the negative sentiment expressed by the industry to these proposals, the FCA has decided to go ahead with them regardless.”
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