April 16, 2024
Crypto News Company
Introduction
The Client is a UK-based news platform that specialises in providing its users with comprehensive analysis and trading information regarding cryptocurrencies, DeFi, and blockchain technology. The Client is approached to enter into a relationship with an existing cryptocurrency exchange. This partnership will facilitate the promotion of potential new token listings on the exchange, which the Client will introduce to its users. The Client also wants the opportunity to invest in these tokens itself. In exchange, the Client will offer premium users information regarding these listings and allow these premium users to be eligible to invest in the tokens.
Client Challenge
Considering the dynamic regulations and policies governing the cryptocurrency sector in the UK, particularly in relation to marketing cryptocurrencies, the principal obstacle that arose was safeguarding the Client’s business from a regulatory perspective while adhering to the prevailing rules and regulations pertaining to the promotion of tokens and digital assets.
Strategies, Tactics, and Solutions
Our legal team evaluated this challenge by studying and applying the FCA’s Financial Promotion Rules for Qualifying Crypto-Assets. In analysing the (very new and) comprehensive regulations, TLP was able to provide the Client a detailed understanding of the rights and limitations of pursuing this business model under the FCA’s rules and in a regulatory compliant manner.
While the Client could potentially benefit from a “journalistic exemption”, this would be a stretch and the ideal solution would be to operate under the direction of the exchange, after the exchange became registered in the UK.
Outcomes
Our analysis ensured that our Client’s interests were safeguarded. After much deliberation, the Client decided to wait and see how the exchange interacted with FCA regulations and, in particular, the level of protection and indemnity the exchange was willing to extend to them to provide such services.
In totality, the evolving rules surrounding marketing of crypto – in particular, influencer marketing – has made it more difficulty for projects to proceed with run-of-the-mill marketing pushes that led to the pumps-and-dumps of the previous bull runs. The regulators are now wisening up and preventing a return to form, even as the market slowly inches out of the bear market.