Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of cryptocurrency advertisements being targeted at (1) young people, and (2) people from minority communities, including with the involvement of celebrities, sports stars and sports teams; and what plans they have, if any, to place restrictions on such advertising.

The government’s ambition is to make the UK a global hub for cryptoasset technology and investment. In April, previous Ministers set out a number of reforms which will see the regulation and aspects of tax treatment of cryptoassets evolve. The government will also consult on its approach to regulating wider cryptoasset activities in the coming weeks.

Recent events in cryptoasset markets have highlighted the importance of establishing regulation which supports safe innovation and protects consumers and stability. As the cryptoasset market has developed rapidly, HMT and the FCA have been working at pace to adapt existing regulation to the challenges – and opportunities – posed by unique cryptoassets.

For instance, to protect consumers, the FCA has banned the sale of cryptoasset derivatives to retail consumers and in January 2022 the government published a response to a consultation on a proposal to bring certain cryptoassets into the scope of financial promotions regulation. The forthcoming legislation on cryptoasset promotions, and supporting FCA rules, will regulate in-scope cryptoasset financial promotions, requiring them to be fair, clear and not misleading. This is aimed at improving consumers’ understanding of the risks and benefits associated with cryptoasset purchases and ensuring that cryptoasset promotions are held to the same standards as similar risk financial services products.

The government also draws attention to and restates the FCA’s warnings to consumers that buyers of most cryptoassets should be prepared to lose all of the money they invest.

The government and the Cryptoassets Taskforce continue to closely monitor the wider cryptoasset market and will stand ready to take further regulatory action if required.