FCA cryptoasset financial promotions: the rules behind the UK marketing ban

The UK extended the financial promotions regime under section 21 of FSMA to qualifying cryptoassets in October 2023, ending a period when cryptoasset marketing operated largely outside FCA oversight. The regime is one of the strictest consumer-facing marketing frameworks for crypto in any major jurisdiction.

The four lawful routes

A cryptoasset promotion communicated to UK consumers must use one of four routes:

1. Communicated by an FCA-authorised firm.
2. Approved by an FCA-authorised firm that has the relevant permission to approve crypto promotions.
3. Communicated by (or on behalf of) a cryptoasset business registered with the FCA under the MLRs, with specific approval to make such promotions.
4. Falls within an exemption under the Financial Promotion Order — narrow, e.g., one-to-one solicited communications to certified high-net-worth investors or sophisticated investors who have completed the statement of approval.

Any promotion outside these four routes is a criminal offence under FSMA section 25 — penalties up to two years imprisonment and an unlimited fine.

Content rulebook (COBS 4 + COBS 22)

Promotions must comply with the FCA's Conduct of Business Sourcebook, including specific cryptoasset rules:

• Risk warning: a prescribed statement — "Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment..." — displayed prominently and not preceded by any incentive or qualifier.
• 24-hour cooling-off for first-time investors with a particular firm: a mandatory pause between the consumer expressing interest and being able to invest, during which the firm cannot send further promotions.
• Categorisation: consumer must be categorised as restricted, high-net-worth, or sophisticated, with appropriate documented suitability assessment.
• Ban on incentives: refer-a-friend bonuses, sign-up bonuses, and similar inducements that distort the investment decision are prohibited.
• No fear-of-missing-out: time-limited offers and countdown timers are restricted.
• Past performance: cannot dominate the communication; must be balanced with risk information.

Influencer and social-media liability

The promotion rules apply to any person making the communication, including affiliates, social-media influencers, and content creators paid in crypto or fiat. The FCA has explicitly stated that influencers operating without authorisation and outside an exemption commit the section 21 offence. Several enforcement notices have been issued.

Memecoin and ART/EMT scope

The financial promotions regime applies to "qualifying cryptoassets" — broadly, fungible and transferable crypto-assets. Some non-fungible tokens fall outside the perimeter, as do certain limited-purpose tokens. Memecoins are in scope if they are transferable and traded.

Stablecoins (whether ART or EMT under MiCA terminology) are also in scope of the UK financial promotions regime, and the FCA + HM Treasury have separately proposed a UK stablecoin issuance and payment-arrangement framework that would impose substantive issuer requirements similar in spirit to MiCA Title III/IV.

Practical guidance

• Exchanges: ensure every customer-facing surface targeting UK users (website, push notifications, email campaigns, partner pages) is reviewed under COBS rules and routed through one of the four lawful channels.
• Marketing teams: maintain a register of every promotion, its route, the approver, and the risk-warning compliance check.
• Influencer programs: do not pay influencers to promote in-scope cryptoassets to UK audiences unless the influencer is authorised, exempt, or the promotion has been approved by an authorised firm.

Primary Sources

• FCA — Cryptoasset promotions regime overview
• Financial Services and Markets Act 2000, s.21
• FCA Policy Statement PS23/6 — Financial promotion rules for cryptoassets
• FCA enforcement actions on unauthorised cryptoasset promotions

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