First-time crypto investors to be offered 'cooling-off' period under new rules

The financial regulator will also ban UK companies that sell crypto assets from offering "refer a friend" bonuses as part of its plans to crack down on advertising in the industry.

Thursday 8 June 2023 02:50, UK

 

 

First-time investors in crypto assets will be offered a 24-hour cooling-off period as part of a wider crackdown on advertising in the industry by the UK’s financial regulator.

First-time investors in cryptoassets should be offered a 24-hour cooling-off period by those marketing them, according to the City regulator.

 

A new advertising crackdown being launched by the Financial Conduct Authority (FCA) will mean firms marketing cryptoassets to UK consumers will need to introduce a cooling-off period for first-time investors from 8 October.

The regulator's policy statement on financial promotion rules for cryptoassets said: "Even when the financial promotions regime comes into force, cryptoassets will remain high risk and largely unregulated.

What's a first time investor? One transaction?

But it's such a sure fire way of getting rich why would anybody need it? ????

I'd want a one year cooling-off period.

How is this going to work? This is stupid and open for abuse.

 

If the prices go up you cash in, if the prices go down you are allowed to simply cancel the transaction?

 

How about a 1 year cooling off period when you buy a condo in Thailand or marry?

I'm sure many crypto investors would prefer a five-year cooling off period, or lifetime even. ????

2 hours ago, Celsius said:

How is this going to work?

It's not going to work. It's not supposed to work. This is the kind of thing they do to strongly discourage companies from selling it.

2 hours ago, Celsius said:

How is this going to work? This is stupid and open for abuse.

 

If the prices go up you cash in, if the prices go down you are allowed to simply cancel the transaction?

 

How about a 1 year cooling off period when you buy a condo in Thailand or marry?

You simply misunderstood what a cool-off period is. The article doesn't explain it at all unfortunately. It means after initially engaging with an investor through marketing, there will be a mandatory 24h period that the company has to wait and then get another confirmation from the investor that they are still interested in going forward.

 

In practice that means that upon signing up the user will have to wait 24h before they can actually do trades.

 

The purpose is to prevent compulsive actions by users that might be even driven by pushy marketing tactics. That's where the wording comes from, the user has to cool off from any marketing or news and jumping into trading in a hasty manner. They get a last chance to think it through.

35 minutes ago, ukrules said:

It's not going to work. It's not supposed to work. This is the kind of thing they do to strongly discourage companies from selling it.

No, it is going to work in that it will put a roadblock to the most aggressive and pushy marketing tactics that put people under pressure to invest. If someone is serious about becoming an investor then spending 24h to think about it is more than reasonable. A lot of brokerages require a lot more than that to allow people to trade. It's the fishy players that don't like rules like this cool-off period.

3 minutes ago, eisfeld said:

In practice that means that upon signing up the user will have to wait 24h before they can actually do trades.

And give them an extra 24Hrs to "squirrel" the money out of sight!

Please don't keep funding the Ponzi schemes!

Great, I can buy 10k BTC and if it tanks later that day I can get my money back and the exchange takes the hit? Then I just sign up to a new exchange, rinse and repeat.