In the early days of crypto, UK regulators largely adopted a hands-off approach. Crypto assets largely fell outside the scope of the Financial Conduct Authority’s (FCA) financial promotions regime*, leaving businesses in a regulatory grey area when marketing to UK consumers.
That changed in October 2023. New FCA rules on financial promotions for crypto assets emerged, aligning crypto marketing with established standards for financial services. These rules introduced firm requirements around risk warnings, fair and balanced presentation, and strict criteria on who can legally promote crypto assets.
This article explains the current regulatory landscape, including the new rules, who they apply to, and what crypto firms need to do to stay compliant. Understanding these requirements is essential if your business markets crypto assets to UK consumers.
Our specialist financial services solicitors can help you navigate the regime and ensure your promotions meet FCA expectations.
*The buying and selling of some crypto assets may be subject to existing regulations, which means the activity constitutes regulated activity under the Financial Services and Markets Act 2000. This will depend on various factors, such as how the crypto assets are promoted and sold.
Contents:
Why did these rules come in?
The FCA and the UK government introduced the new rules in response to growing concerns about consumer harm. Crypto asset promotions, often delivered through social media or influencer marketing, frequently failed to present balanced information about the risks involved.
At the same time, the traditional path for financial promotions (via FCA-authorised firms) wasn’t a practical fit for many crypto businesses. Many firms providing crypto asset exchange or custodian services are registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) rather than authorised by the FCA, meaning they had no clear route to promote crypto assets in the UK lawfully. Many firms provide such services to UK consumers without either, e.g., international firms established in other countries.
To address this, the government created a bespoke exemption for certain crypto firms, allowing them to promote qualifying crypto assets directly, provided they meet strict standards. The aim is to balance enabling innovation in the UK crypto sector and holding firms accountable.
What changed in October 2023?
Since 8 October 2023, all firms marketing crypto assets to UK consumers – whether based in the UK or overseas – must comply with the Financial Conduct Authority’s (FCA) financial promotion rules.
This marked a significant regulatory milestone, bringing crypto asset promotions squarely within the FCA’s remit for the first time. Under the rules, any promotion of qualifying crypto assets must:
- Be fair, transparent, and not misleading
- Include appropriate risk warnings
- Avoid incentives (like refer-a-friend bonuses or limited-time offers) that could unduly influence consumer decisions.
- Be issued or approved by an authorised firm with permission under the FCA’s financial promotion gateway.
Promotions that fail to meet these standards could result in the FCA taking enforcement action against the person who has communicated the financial promotion.
The rules apply to all qualifying crypto assets, and the FCA has clarified that enforcement is already underway against many firms and individuals who have breached them.
Direct offer promotions and cooling-off periods
Suppose a crypto promotion invites a consumer to invest immediately (a direct offer). In that case, firms must conduct an appropriateness assessment and provide a personalised risk warning before the customer can proceed. In addition, a 24-hour cooling-off period must be given before the consumer can act on the promotion.
The bespoke exemption for MLR-registered firms
The government introduced a bespoke exemption, recognising that most crypto firms are not fully authorised by the FCA but registered under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs).
This exemption permits MLR-registered crypto asset businesses to communicate their promotions without needing approval from an FCA-authorised person, as long as:
- The promotion relates to qualifying crypto assets (see next section).
- The business was registered with the FCA under the MLRs before 8 October 2023 (registered companies after this date cannot use it to communicate promotions).
- The promotion complies with FCA standards (e.g., it must be fair, clear, and not misleading, and include the required risk warnings).
Importantly, this exemption only covers crypto asset promotions. It doesn’t apply to promotions of other financial products or services and doesn’t remove firms from broader compliance requirements.
What are qualifying crypto assets?
A crypto asset must be classified as a qualifying crypto asset to fall within the UK's financial promotion regime. Qualifying crypto assets are tokens that are both fungible and transferable and that do not fall into categories already covered by other regulations.
A token is excluded if it is:
- A controlled investment (e.g., shares, debt instruments, derivatives, etc.).
- Electronic money, as defined under the Electronic Money Regulations.
- A currency issued by a public authority (including digital fiat).
- A limited-use token, for example, one that can only be used with a specific merchant or within a closed ecosystem
Non-fungible tokens are out of scope due to their non-fungible nature.
Wrapped and hybrid tokens are also not specifically addressed and must be assessed case-by-case. The definition deliberately avoids tying eligibility to any particular technology, such as blockchain or distributed ledger technology, giving firms flexibility depending on how the token functions.
Under the current FCA regime, qualifying crypto assets are classified as Restricted Mass Market Investments. This means they are treated as high-risk products, with additional restrictions and consumer protection measures applying to how they can be marketed to retail investors.
What happens next?
The regulatory landscape for crypto assets in the UK is expected to evolve further in the coming months:
- December 2024: The FCA released Discussion Paper DP24/4 seeking feedback on regulating crypto assets, particularly concerning admissions, disclosures, and market abuse regimes. Stakeholders were invited to submit comments by 14 March 2025.
- 2025/26 Work Programme: The FCA’s annual work programme outlines plans to invest £7.8 million to develop a proportionate and secure regulatory regime for crypto activities in the UK.
If you need advice on crypto asset promotions or your firm’s compliance with the FCA regime, our financial services solicitors are here to help.
