FCA provides marketing rules guidance for crypto firms
Following a recent change in legislation, cryptoassets promotions targeting UK consumers now fall within the remit of financial regulator Financial Conduct Authority (FCA). The FCA has introduced rules that are designed to give people a better understanding of what they are investing in, and the risks involved.
Following a consultation, the regulator has now published Guidance to further support crypto firms complying with the new marketing rules. The Guidance also details how authorised firms communicating or approving financial promotions should apply the Consumer Duty to their marketing.
Lucy Castledine, Director of Consumer Investments at the FCA, said:
“While the new rules for firms marketing crypto to UK consumers are aligned with the existing rules for other high-risk investments, we’ve engaged extensively with industry and designed this Guidance to specifically support crypto firms complying.
“We continuously seek industry’s input to get rules, their implementation, and the support we offer right. This Guidance is no exception and we’re grateful for all the input we received during the consultation period.”
The cryptoasset sector and the global regulatory environment are developing at pace, so the FCA said it will continue to engage with firms and keep its Guidance under review.
To further support firms make necessary improvements to their marketing, the FCA previously published examples of good and poor practice on firms’ preparations for the new financial promotions rules. The regulator said it will continue to remind people that despite these new rules, cryptoassets remains high-risk and people should be prepared to lose all the money they invest.
Consumers should check the Warning List before making any investment in cryptoassets. The list will help consumers make more informed investment decisions by finding details of unauthorised firms the FCA is aware of. It also helps consumers understand which firms may be providing or promoting financial services or products in the UK without permission.
The FCA has offered cryptoasset firms registered or authorised by the FCA flexibility under a modification by consent to implement parts of the rules that require greater technical development. If their application is successful, they will have until 8 January 2024 to implement the 24-hour cooling period, client appropriateness testing and client categorisation features. All other measures of the financial promotions regime came into effect from 8 October 2023.
Since 8 October 2023, firms wishing to promote cryptoassets in the UK to retail consumers’ must, by law, be authorised or registered by the FCA, or have their marketing approved by an authorised firm. The rules for marketing cryptoassets to UK consumers are aligned with existing rules for other high-risk investments. The rules on promoting cryptoassets follow extensive work with the Government on their consultation on the future financial services regulatory regime for cryptoassets and collaboration with international counterparts and the wider industry.
The FCA also said that it will shortly publish a Discussion Paper that sets out proposals for regulating stablecoins for use in payments in the UK.
The FCA’s crypto marketing guidance can be seen here (pdf).