The UK's Financial Conduct Authority (FCA) has issued new guidance for crypto firms advertising their services, following the introduction of promotional regulations in October 2023. This move aims to align companies with the latest requirements, ensuring consumer protection and market integrity. Discover how the FCA's ongoing efforts are shaping the future of crypto advertising in the UK.



The Financial Conduct Authority (FCA), the United Kingdom's financial regulator, has intensified its efforts to bring crypto service providers into compliance with advertising regulations that came into effect in October 2023. This latest round of guidance underscores the FCA's commitment to ensuring that companies adhere to new promotional standards designed to protect consumers and uphold market integrity.


New Guidance for Crypto Advertising

In its ongoing mission to regulate the rapidly growing cryptocurrency market, the FCA has released updated guidelines for firms that promote crypto services. This follows the initial implementation of advertising regulations in October 2023, which marked a significant step in the FCA's regulatory oversight of the sector.


Assessing Compliance and Practices

To evaluate how well companies were implementing these new requirements, the FCA conducted a thorough examination of selected firms. This involved requesting information and making site visits to assess their practices regarding several key areas:

  • 24-hour Cooling-off Period: Ensuring that consumers have a mandatory period to reconsider their investment decisions.

  • Personalized Risk Warnings: Providing tailored warnings to consumers about the risks associated with crypto investments.

  • Client Categorization: Properly categorizing clients to match their risk profiles with suitable products.

  • Assessing Investment Appropriateness: Evaluating whether a crypto investment is suitable for a client based on their financial situation and experience.

  • Recordkeeping and Due Diligence: Maintaining accurate records and conducting thorough due diligence on crypto assets.


Findings: Good vs. Poor Practices

The FCA's findings highlighted both commendable and inadequate practices among the firms reviewed.


Good Practices

One of the notable good practices included clearly communicating the cooling-off period to consumers, ensuring they understand its purpose to give them ample time to consider if the product is suitable for them.


Poor Practices

Conversely, the FCA identified several poor practices, such as an over-reliance on industry comparisons to benchmark acceptable standards. Given the widespread poor practices in the market, the FCA advised against this approach. Instead, firms are encouraged to engage directly with the regulator to elevate standards across the sector.


The FCA also noted that some firms' due diligence efforts were overly focused on whether the crypto asset was classified as a security in certain jurisdictions, rather than aligning with UK regulatory requirements.


The Road to Compliance

The FCA's journey towards comprehensive crypto regulation has been gradual but determined. After announcing new rules in June 2023, which replaced those set in August 2022, the FCA anticipated that not all firms would achieve compliance by the October deadline. Consequently, it granted an extension until January 8, 2024, for certain companies to fully comply.


Enforcement and Additional Rules

Despite the extension, the FCA found over 200 breaches of the new promotional rules within just a few weeks of their enforcement. High-profile exchanges, including Binance, faced compliance challenges due to restrictions on their banking partners.


In response to these breaches, the FCA released additional rules in November 2023 to further assist crypto companies in meeting compliance standards. These supplementary guidelines are part of the FCA's broader strategy to ensure that the rapidly evolving crypto market operates within a robust regulatory framework.


The FCA's proactive measures underscore the importance of stringent regulatory oversight in the cryptocurrency sector. By continually updating and enforcing advertising guidelines, the FCA aims to protect consumers and promote transparency and integrity within the market.


As the regulatory environment for cryptocurrencies continues to evolve, firms operating in the UK must stay abreast of these changes and engage with the FCA to ensure compliance. The FCA's efforts signal a clear message: adherence to regulatory standards is paramount for the sustainable growth and credibility of the crypto industry.


(Derek Andersen, Cointelegraph, 2024)