Cryptoasset Promotions Under the FCA

Introduction

Once known as the "Wild West" of finance, the crypto industry in the UK is now subject to much tighter marketing rules. As of 8 October 2023, cryptoasset promotions have been brought within the scope of the UK's financial promotion regime. This change – driven by both legislation and FCA rules – marks a new compliance frontier for crypto firms. In 2026, any company promoting cryptoassets to UK consumers must navigate a regulatory environment similar to that for traditional high-risk investment products, with a strong focus on consumer protection.

For many fintech and crypto entrepreneurs, these promotion rules may be unfamiliar territory. Non-compliance isn't an option: communicating an illegal financial promotion is a criminal offence in the UK (with potential for hefty fines or other enforcement). Beyond that, failing to meet the standards can damage your firm's reputation in a highly scrutinized market.

The good news is that the requirements, while strict, are clear and achievable with the right approach. This article breaks down the key rules for crypto promotions under FCA oversight and offers guidance on how to adapt your marketing and customer engagement in light of these rules.

The Legal Basics: Routes to Communicate a Crypto Promotion

Under UK law (specifically, the Financial Services and Markets Act 2000 and the Financial Promotion Order as amended), a "financial promotion" is basically any invitation or inducement to engage in investment activity, made in the course of business. After 8 October 2023, most cryptoassets (termed "qualifying cryptoassets") are considered investments for these purposes. That means you cannot just run a crypto ad or send a promotional email to UK consumers unless you do so through one of a few legal routes.

The FCA outlined four routes crypto firms can use to lawfully communicate a promotion:

1. Promotion by an FCA-Authorised Firm

If a firm authorised by the FCA (under the FSMA regime) directly communicates the promotion, it's allowed. For example, if you partner with a fully authorised asset manager or broker and they issue the marketing materials under their name, this route is satisfied.

2. Promotion Approved by an Authorised Firm

An alternative is getting your promotion approved by an FCA-authorised firm (often referred to as a Section 21 approver). The authorised firm vets the content and explicitly signs it off as compliant with FCA rules. Once approved, you (as an unauthorised firm) can communicate it. Note: The approving firm assumes regulatory liability for the promotion's compliance. By late 2023 the FCA had already taken action against an authorised firm for poor-quality crypto approvals, so this route requires finding a reputable approver and collaborating closely.

3. Self-Promotion by FCA Registered Crypto Firm

The UK introduced a special exemption allowing crypto firms that are registered with the FCA under the Money Laundering Regulations (MLR) to communicate their own promotions, provided they comply with the FCA's crypto promotion rules. Many crypto exchanges and service providers in the UK fall in this category. This route was designed to let those registered firms advertise without always needing an authorised third party – however, they must adhere to the same stringent rules as an authorised firm would.

4. Promotion under an Exemption

There are certain exemptions in the law (Schedule 1 of the Financial Promotion Order) where a promotion can be made legally without authorisation. For example, communications to investment professionals or high-net-worth individuals may be exempt. In practice, these are more niche and if you're targeting retail consumers, you likely won't rely on this except for very specific scenarios.

Important: If none of these routes apply, a crypto promotion to UK consumers is illegal. The FCA has been vigilant – within weeks of the regime taking effect, they issued hundreds of alerts about firms breaching the rules and worked with social media platforms to take down illegal ads.

What the FCA's Crypto Promotion Rules Require

Satisfying the legal route is just step one. Step two: content and conduct requirements. The FCA has laid out specific rules in its handbook as well as in Policy Statement PS23/6 "Financial promotion rules for cryptoassets" (June 2023). These largely mirror the rules for other high-risk investments with some crypto-specific tweaks:

Fair, Clear, Not Misleading

All communications must be fair and balanced. You cannot cherry-pick only the benefits of a crypto product without equally highlighting the relevant risks. Any claims you make need to be accurate and not create a misleading impression. The FCA will scrutinize language that even hints at crypto being a safe or low-risk bet.

Prominent Risk Warnings

Every crypto promotion to a retail consumer must include a standard risk warning with FCA-prescribed wording: "Don't invest unless you're prepared to lose all your money" and a reminder that cryptoassets are high risk and unregulated. The warning must be prominent – clear font, noticeable size, and placed in an obvious location.

No 'Buy Now' Urgency or Inducements

Firms are banned from offering incentives that could unduly influence investment in cryptoassets. This includes refer-a-friend bonuses, new joiner discounts, time-limited offers, or any gamified encouragement to invest more. Promotions should focus on factual information, not on gimmicks or FOMO.

"Positive Friction" for New Investors

The FCA introduced a 24-hour cooling-off period for first-time crypto investors. If an individual has never invested in crypto before (with your firm), you must impose a pause from the moment they request to start investing. During this window, they should be presented with risk warnings and educational material, then must reconfirm their intention to proceed after 24 hours.

Client Categorisation and Appropriateness

The new rules classify cryptoassets as Restricted Mass Market Investments (RMMIs). Before making a direct offer promotion, firms need to ensure the customer meets certain criteria – have them categorise themselves and conduct an appropriateness assessment testing if the person understands basic crypto risks. For a deeper look at how appropriateness assessments differ from suitability checks, see our guide on appropriateness vs suitability. Ensure you have record-keeping to evidence these checks were done.

Personalised Risk Warning

A unique requirement in the crypto rules is delivering the risk warning in a personalised manner to each retail investor – typically including the user's first name. The intention is to make the warning feel more targeted and noticed by the individual. This message often appears as a pop-up that the user must acknowledge.

Common Pitfalls to Avoid

Even well-intentioned firms can slip up. The FCA has highlighted several bad practices in its feedback on early compliance:

Burying or Downplaying Risk Warnings

Some promotions place the risk warning at the bottom in small text or use colors that make it hard to read. This defeats the purpose. Warnings need to be front and center – not the afterthought.

Overemphasis on Benefits

Promotions that focus heavily on potential gains or exciting opportunities without equally addressing that people can lose everything are imbalanced. Ensure your content treats the upside and downside proportionally.

Continuing Incentive Schemes

Referral bonuses and welcome credits were a mainstay in crypto marketing. Under the new rules, these must go. If your platform still runs a "bonus crypto for your first trade" promotion, you are likely breaching the rules. Withdraw or adapt such campaigns immediately.

Skipping Cooling-Off for 'Returning' Users

Some firms assume a user who created an account long ago is not a first-time investor. Unless you can prove the user has invested in crypto via your platform before the rules took effect, treat them as new. It's better to apply the cooling-off period than assume exemption and end up non-compliant.

Using Influencers Without Controls

Social media influencer marketing was common in crypto. Post-October 2023, influencer posts promoting your crypto services can be financial promotions and need to comply. If an influencer makes exaggerated claims or omits risk warnings, your firm could be liable. Either have content approved in advance or avoid this channel for retail promotion.

Adjusting Your Workflow for Compliance

Adopting a compliant marketing approach may require operational changes. Here's a framework for adapting:

Determine Your Legal Route

Confirm whether you are FCA-authorised, MLR-registered with the FCA, or need a Section 21 approval. If you're overseas-based and promoting to UK consumers remotely, you should likely avoid doing so or get proper UK authorisation. Establish your legal position before drafting any promotions.

Create a Compliance Checklist

Develop a standard checklist for all marketing materials: correct risk warning present? Wording fair and balanced? No inducements or urgency language? Content approved by a qualified person/firm? Use this checklist for every ad, email, or social post before publishing.

Build the Customer Journey Controls

Modify your app or platform to include appropriateness questionnaires for new crypto investors, client categorisation flows, and the 24-hour cooling-off pause. These are mandatory for direct offer promotions, so they must be woven into the user experience.

Train Your Team

Marketing teams should understand the boundaries of what can and cannot be said. Compliance teams should be well-versed in PS23/6. Shared training sessions can help align everyone.

Monitor and Document

Keep records of all promotions and approvals. If the FCA asks to see your promotions and the process behind them, you should be able to produce evidence. Also, monitor for any user feedback indicating confusion or misunderstanding – that's a signal something might need improvement.

How RegTech Can Help

Managing compliance manually can be resource-intensive, especially for growing crypto businesses. RegTech solutions can ease the load by:

Centralised Content Approval

Platforms that route promotional content through a structured approval workflow ensure every asset is reviewed before going live. They create an audit trail and can enforce mandatory fields (like risk warning inclusion) before sign-off.

Standardised Warning Templates

Maintaining a library of FCA-compliant risk warnings and disclosure snippets that marketing teams can insert easily. This reduces the risk of someone drafting a new (and possibly non-compliant) warning from scratch.

Content Scanning

Some tools can scan text for flagged phrases ("guaranteed returns", "risk-free", etc.) and automatically alert reviewers. This acts as a safety net to catch obvious issues.

Compliance Dashboards

See at a glance which promotions are live, pending review, or expired. This oversight helps compliance officers stay on top of the firm's promotional footprint and ensures nothing slips through the cracks.

Technology isn't a silver bullet – it must be paired with skilled compliance oversight – but it can significantly improve efficiency and reduce human error.

Conclusion

Cryptoasset promotions in the UK are no longer a regulatory grey area. Firms operating in this space must embrace the FCA's promotion rules as a fundamental part of their operations. The stakes are high – non-compliance can result in criminal penalties, FCA warnings (which are public and damaging), or outright bans from operating.

By adhering to the FCA's rules – using the proper approval routes, embedding clear risk warnings and cooling-off periods, and avoiding misleading tactics – firms not only stay on the right side of the law, they also contribute to a healthier market. Consumers who are well-informed about risks and not pressured by glossy advertising are more likely to trust the industry in the long run.

Navigating this new compliance frontier requires effort and maybe some cultural adjustment, especially for startups used to a fast-and-loose approach. But with robust processes, training, and possibly the aid of RegTech tools, it becomes an achievable part of operations. Compliant crypto promotions are now part of doing business in the UK. Embrace the rules as a framework for transparent and fair communication – in doing so, you gain something very valuable in finance: the trust of your customers and regulators alike.