New rules will come into effect this Sunday 8 October 2023, imposing restrictions on the promotion of “qualifying cryptoassets” to UK consumers.

These rules will be relevant to:

  • cryptoasset firms registered (or considering, or in the process of, registering) with the UK Financial Conduct Authority (FCA) under the Money Laundering Regulations;
  • overseas cryptoasset firms marketing, or considering marketing, to UK consumers;
  • authorised firms considering communicating or approving cryptoasset financial promotions;
  • trade bodies for the cryptoasset sector; and
  • any other persons involved in communicating cryptoasset promotions to UK consumers.

Key takeaways of these new rules include the following:

  • Stricter regulation of advertisers – in order to lawfully communicate a cryptoasset promotion, firms must either:
    • be registered with the FCA under the Money Laundering Regulations;
    • be authorised by the FCA;
    • have the promotion approved by a person authorised by the UK; or
    • fall within specific exemptions.
  • Stricter regulation of advertisements – cryptoasset promotions made to UK consumers will now need to meet requirements under the UK financial promotion regime (including the requirement to be fair, clear, and not misleading).
  • Risk warning requirements – risk warnings will be required in cryptoasset promotions, in order to ensure that consumers are informed about the potential risks of investing in cryptoassets. 
  • Ban on incentives – cryptoasset promotions that include monetary or non-monetary benefits that incentivise investment (for example, offering additional ‘free’ cryptoassets, or certain limited time offers) will be banned.
  • Broadened geographical scope – the new rules will apply all firms marketing cryptoassets to UK consumers, regardless of where in the world they are based. Firms based in the EU and elsewhere overseas may therefore be subject to these rules.

All firms marketing cryptoassets to UK customers must understand (and be ready to comply with) the new rules. The FCA have said it will be taking robust action against anyone who falls foul of these new requirements. This may include placing firms on the FCA’s warning list, requesting take downs of websites, social media accounts, applications and all other promotions that are in breach, and enforcement action. Criminal penalties are also possible.

If you would like more information on the above, please get in touch with me or another member of the Fox Williams team.


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