FCA Cryptoasset Financial Promotions Rules: What Every UK Crypto Firm Must Know

FCA cryptoasset financial promotions rules represent one of the most impactful regulatory changes affecting UK crypto firms in recent years. Policy Statement PS23/6, which took effect on 8 October 2023, extended the financial promotions regime under Section 21 of the Financial Services and Markets Act 2000 (FSMA) to qualifying cryptoassets. Any communication — including websites, social media posts, email campaigns, advertisements and influencer content — that constitutes an invitation or inducement to engage in cryptoasset activity is now subject to FCA regulation. Non-compliance carries serious consequences including criminal liability, FCA enforcement action and reputational damage. This article explains the regime in full, including who can issue promotions, what they must contain, and how the FCA is enforcing compliance.

What Are Cryptoasset Financial Promotions Rules?

The cryptoasset financial promotions rules are the regulatory requirements governing the marketing and advertising of cryptoassets to UK consumers. Under Section 21 of FSMA, a person must not, in the course of business, communicate an invitation or inducement to engage in investment activity unless the communication is made or approved by an authorised person, or falls within an exemption. PS23/6 extended this restriction to qualifying cryptoassets — defined as any cryptographically secured digital representation of value or contractual rights that is fungible and transferable, excluding e-money tokens and digital currencies already regulated as e-money. The regime applies to all communications capable of having an effect in the United Kingdom, regardless of where the communicator is based. This means overseas crypto firms marketing to UK consumers are caught by the regime. The standard applied to all cryptoasset promotions is that they must be clear, fair and not misleading — the same standard applied to financial promotions for traditional investment products.

Who Must Comply?

This requirement applies to:

• FCA-registered cryptoasset firms communicating their own promotions
• FCA-authorised firms (banks, investment firms, payment institutions) communicating or approving cryptoasset promotions
• Overseas cryptoasset firms marketing to UK consumers
• Marketing agencies and content creators producing promotional material for crypto firms
• Social media influencers promoting cryptoassets to UK audiences (where the content constitutes a financial promotion)
• Cryptoasset firms using affiliate marketing programmes targeting UK consumers
• Any person communicating, in the course of business, an invitation or inducement to engage in cryptoasset activity capable of having an effect in the UK

Key Regulatory Requirements

Who can lawfully communicate or approve promotions. There are four categories of persons who can lawfully communicate or approve a cryptoasset financial promotion:

(1) FCA-authorised persons — firms authorised by the FCA under FSMA can communicate their own cryptoasset promotions, provided the promotions comply with the applicable rules.

(2) FCA-registered cryptoasset firms — firms registered under the MLRs 2017 for cryptoasset activities can communicate their own promotions, subject to compliance with the financial promotions rules.

(3) Exempt persons — certain persons are exempt from the financial promotions restriction under the Financial Promotion Order 2005, including communications to high-net-worth individuals, sophisticated investors, or in connection with certified high-net-worth individual or self-certified sophisticated investor exemptions. These exemptions apply but are narrow and must be applied precisely.

(4) Section 21 approver firms — FCA-authorised firms that have applied for and been granted s.21 approver status by the FCA can approve cryptoasset promotions made by unauthorised persons. The FCA introduced a new approval gateway requiring firms to apply specifically for permission to approve crypto promotions.

Mandatory risk warnings. All cryptoasset promotions must include prominent risk warnings. The FCA prescribes specific risk warning text that must be included: "Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong." The risk warning must be prominent — it cannot be buried in footnotes or small print. For digital promotions, the risk warning must be visible without the user needing to scroll or click through to additional content.

Clear, fair and not misleading standard. All promotions must meet the "clear, fair and not misleading" standard. This prohibits: exaggerated claims about potential returns, misleading comparisons between cryptoassets and regulated savings or investment products, selective presentation of historical performance, omission of material risks, and any communication likely to create a misleading impression about the nature, risks or expected returns of cryptoasset investment.

Cooling-off period. For direct-offer financial promotions (where the consumer can respond directly to the promotion to acquire cryptoassets), a 24-hour cooling-off period applies. First-time investors must confirm that they wish to proceed after receiving the risk warnings, and the firm must wait 24 hours before completing the transaction.

Client categorisation. Firms must assess whether the consumer is a restricted investor, a high-net-worth investor or a sophisticated investor. Different communication rules apply to each category. Mass-market promotions to retail consumers face the most restrictive requirements.

The Compliance Process: Step by Step

Step 1 — Audit all existing marketing materials. Review every piece of marketing content — website pages, social media posts, email templates, advertising copy, affiliate materials and influencer briefs — against the financial promotions rules. Identify non-compliant content. Timeline: 1–2 weeks.

Step 2 — Implement risk warnings. Add the prescribed FCA risk warning text to all promotions. Ensure the risk warning is prominent, not buried, and visible without user interaction. Timeline: 1 week.

Step 3 — Review claims and comparisons. Remove or revise any content that makes exaggerated return claims, misleading comparisons with traditional investments, or selective use of historical performance data. Timeline: 1–2 weeks.

Step 4 — Establish an approval process. Implement an internal process for reviewing and approving all marketing content before publication. All promotions must be signed off by the compliance function. If using a s.21 approver, establish the approval workflow and lead times. Timeline: 2–4 weeks.

Step 5 — Train all staff. Ensure marketing, sales, social media and customer-facing staff understand the financial promotions rules and the consequences of non-compliance. Document the training. Timeline: 1–2 weeks.

Common Violations and FCA Enforcement

The FCA has been actively enforcing the cryptoasset financial promotions regime since October 2023. The regulator has issued over 450 alerts against firms and individuals communicating non-compliant cryptoasset promotions. Common violations include:

Past performance claims presented without required disclaimers and context. Firms that highlight historical price appreciation without explaining that past performance is not a reliable indicator of future results, and without including the prescribed risk warning, are in breach.

Missing or inadequate risk warnings. Promotions that omit the required risk warning entirely, or that include it in small, inconspicuous text that fails the prominence test, are the most common violation.

Misleading comparisons with traditional investments. Marketing copy that suggests cryptoassets are equivalent to or safer than regulated savings accounts, ISAs or pension investments is misleading and constitutes a breach.

Influencer content without required disclosures. Social media influencers promoting cryptoassets without required risk warnings and without disclosing the commercial nature of the relationship are in breach — and the crypto firm that commissioned the content is responsible.

What Firms Should Do Now

1. Conduct a comprehensive audit of all marketing materials — every webpage, social media post, email campaign, advertisement and affiliate material must be reviewed against PS23/6 requirements.
2. Implement the prescribed FCA risk warnings prominently in all promotions — prominence means visible without scrolling, clicking or navigating away from the promotional content.
3. Remove all past performance claims that lack required disclaimers, all misleading comparisons with regulated products, and all content that exaggerates potential returns.
4. Establish an internal compliance approval process for all marketing content, with documented sign-off before publication.
5. If using a s.21 approver, confirm that the approver holds the necessary FCA permission and establish the approval workflow.
6. Train all relevant staff — marketing, sales, social media managers and any third-party content creators — on the financial promotions rules and document the training.

Regulatory Context and Outlook

The FCA has signalled that cryptoasset financial promotions enforcement will intensify. The regulator's 2024/25 Business Plan identifies crypto promotions as a priority enforcement area, and the FCA has invested in technology to monitor social media and online advertising for non-compliant content. The FCA has also pursued enforcement against overseas firms marketing to UK consumers without compliance — the territorial reach of the regime extends to any communication capable of having an effect in the UK. As the FSMA cryptoasset regime takes effect from October 2027, the financial promotions rules will be integrated with the broader conduct of business framework. Firms that establish robust financial promotions compliance now will be better positioned for the transition.

Regulatory Counsel advises cryptoasset firms on financial promotions compliance including marketing audits, risk warning implementation, compliance approval processes and staff training. Our team has direct experience of the FCA's approach to cryptoasset financial promotions and enforcement. Firms seeking specialist support with cryptoasset financial promotions compliance can contact Regulatory Counsel for a free initial consultation. See our financial crime service for details.