TechFlow news — On June 9, Matthew Long, Director of Payments and Digital Assets at the UK Financial Conduct Authority (FCA), said that free airdrops of non-fungible tokens (NFTs) or cryptocurrencies used to promote investment in digital assets will be banned once the FCA's new rules take effect.
According to a report released by the FCA on Thursday, the UK’s strict regulations on cryptocurrency financial promotions will come into force on October 8.
Under these rules, cryptocurrencies will be classified as "restricted mass-market investments," and advertisements related to crypto assets must include clear risk warnings. In addition, incentives encouraging the public to invest in cryptocurrencies will be prohibited.
In the past, crypto firms and celebrities have given customers and fans free NFTs linked to a project’s blockchain or representing real-world assets. As part of broader marketing campaigns, projects have also distributed cryptocurrency airdrops. Matthew Long, the FCA’s Director of Payments and Digital Assets, said that when these free NFTs and airdrops are used to promote investment in crypto products, consumers purchasing such cryptocurrencies may face “problems down the line.”
Long emphasized that airdrops of cryptocurrencies and NFTs themselves will not be banned—only their use in promotional activities will be restricted. Last year, during the FCA’s consultation on its marketing rules, respondents largely disagreed with proposals such as banning incentives, treating crypto as a mass-market investment, and blocking new investors from receiving non-real-time financial promotions (DOFP), the FCA’s policy document published Thursday noted.
Typically, only entities authorized by the FCA can approve their own advertisements. Since there is currently no framework allowing the FCA to fully authorize crypto firms, the government has introduced a time-limited exemption enabling crypto firms registered with the FCA—which meet its anti-money laundering requirements—to approve their own ads starting in October.
