On 2 November 2023, the Financial Conduct Authority (FCA) published finalised non-handbook guidance on cryptoasset financial promotions in the United Kingdom (FG23/3) together with a press release (Press Release) to further support cryptoasset firms complying with the new marketing rules. FG23/3 provides information on, and sets out the FCA’s expectations of, the communication and approval of financial promotions relating to qualifying cryptoassets.
Qualifying cryptoassets are defined broadly to mean any cryptographically secured digital representation of value or contractual rights that are transferable and fungible. Notably, they do not include cryptoassets that meet the definition of electronic money or an existing controlled investment.
FG23/3 applies to:
- authorised persons who communicate or approve financial promotions relating to qualifying cryptoassets;
- persons registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (MLRs) who communicate financial promotions relating to qualifying cryptoassets; and
- other persons involved in the communication of financial promotions relating to qualifying cryptoassets, including cryptoasset firms that are not MLR registered persons, as well as social media influencers and platforms.
In particular, FG23/3 covers the following areas:
- the context and scope of the cryptoasset financial promotion regime;
- the application of FCA rules on cryptoasset financial promotions;
- ensuring cryptoasset financial promotions are fair, clear and not misleading;
- financial promotions on social media (including so-called “finfluencer” posts);
- due diligence before communicating a financial promotion; and
- disclosing legal and beneficial ownership of a cryptoasset.
FG23/3 does not create new obligations for firms, but relates to firms’ existing regulatory obligations. FG23/3 need not be followed to achieve compliance with the relevant rule or requirement. However, if a person follows the guidance in the relevant circumstances contemplated by FG23/3, the FCA will treat that person as having complied with the rule or requirement to which that guidance relates.
The FCA reiterates that, despite the cryptoasset marketing rules, cryptoassets remain high-risk and people should be prepared to lose all the money they invest. The FCA advises consumers to check its Warning List of unregulated firms before making any investment in cryptoassets.
For further information on the FCA’s cryptoasset financial promotions regime, please see our most recent article on this subject matter available here.