Marketing Crypto to UK Consumers: Financial Promotion Routes, Approvals and Customer Safeguards

By CRYPTOVERSE Legal Consultancy

A crypto business needs a lawful financial promotion route before marketing qualifying cryptoassets to UK consumers. It must then satisfy the requirements applicable to the communication and, where relevant, the customer investment journey.

An overseas licence, a risk disclaimer or an application for FCA authorisation does not, by itself, establish that route.

For exchanges, brokers, custodians and token projects, compliance therefore involves two connected assessments: who can communicate the promotion, and how the promotion and customer journey must operate.

The UK crypto marketing rules already apply

The financial promotions regime for qualifying cryptoassets has applied since 8 October 2023. It reaches firms marketing to UK consumers regardless of their location or the technology used.

Communications made outside a lawful route can breach section 21 of the Financial Services and Markets Act 2000—FSMA. FCA

A UK expansion project should therefore address marketing compliance before launching campaigns or opening an investment journey.

Review the complete customer acquisition process, including advertisements, landing pages, applications, emails and referral arrangements. A compliant homepage does not establish that every subsequent communication is compliant.

Identify whether the communication is a financial promotion

Section 21 concerns invitations or inducements to engage in investment activity communicated in the course of business. The assessment depends on the communication’s substance and context. Reference: FG23/3, section 2. fca.org.uk

For practical review, examine what the communication encourages its audience to do.

Relevant material may include:

• Product advertisements and trading invitations.
• Token sale announcements.
• Promotional videos and influencer scripts.
• Referral campaigns.
• Messages encouraging customers to deposit or invest.
• Product comparisons linked to an acquisition journey.

Calling content “education” should not replace an assessment of its wording, links and commercial purpose.

Document the conclusion for each campaign format, particularly where informational content leads directly to a transaction interface.

Understand the four lawful promotion routes

The FCA identifies four routes:

Authorisation solely under the Electronic Money Regulations or Payment Services Regulations does not make a firm an authorised person for these purposes. Promotions through the first three routes must comply with applicable FCA rules. FCA

Record the route relied upon before publication. That record should identify the communicating entity, audience, product and supporting legal analysis.

Check the approver’s permission and the approval’s scope

Since 7 February 2024, authorised firms generally need specific FCA permission to approve promotions for unauthorised persons, subject to exemptions. Approval also involves applicable competence, compliance and monitoring requirements. References: FSMA section 55NA; FCA guidance on approving financial promotions. FCA

Before relying on an approver, establish:

• Its regulatory status and approval permission.
• Whether the proposed product falls within its scope.
• Which content and customer journey it will assess.
• How amendments will be reviewed.
• What ongoing monitoring it requires.
• How withdrawal of approval will be handled.

A legal review is not itself statutory section 21 approval. The engagement should distinguish advice, content preparation and formal regulatory approval.

Version control matters. An approval relating to one advertisement should not be assumed to cover a later variation.

Understand the limits of MLR registration

Article 73ZA of the Financial Promotion Order provides a conditional route for FCA MLR-registered cryptoasset businesses to communicate their own qualifying cryptoasset promotions. It does not give them a general power to approve promotions for other businesses. Reference: FG23/3. fca.org.uk

A group should assess which legal entity communicates each promotion.

For example, a registered operating company, an overseas affiliate and an external influencer may perform different roles. Avoid treating the operating company’s registration as a blanket permission covering everyone involved.

Maintain a register showing the entity responsible for each website, account and campaign.

Make the promotion fair, clear and not misleading

The FCA expects balanced communications that explain material risks and accurately describe the product and its regulatory status. Reference: FG23/3. fca.org.uk

A useful content review tests whether a customer could misunderstand:

• How returns arise.
• Whether capital can be lost.
• Who holds the assets.
• Whether withdrawals are restricted.
• What fees apply.
• Which entity provides the service.
• What regulatory protections are available.

Support factual claims with evidence. Statements about security, liquidity, reserves or guaranteed performance deserve particular scrutiny.

Illustrative example: A campaign describes a yield product as “safe income”, while its terms allow losses and delayed withdrawal. Correct the central representation; adding a warning at the bottom does not resolve the inconsistency.

Apply risk warnings and review incentives

COBS 4.12A.11R addresses prescribed risk warnings and summaries. COBS 4.12A.7R prohibits monetary and non-monetary incentives to invest within its scope. Related guidance includes referral bonuses and certain free investment benefits. handbook.fca.org.uk

Review acquisition campaigns before launch, including:

• Deposit rewards.
• Trading-linked bonuses.
• Referral payments.
• Free tokens.
• Promotional gifts.
• Discounts linked to investment.

The assessment should explain whether a benefit falls within the restriction.

For warnings, check the actual presentation across mobile screens, videos and other formats. Record screenshots of what customers see, rather than relying exclusively on an approved text document.

Build the cooling-off period into the right stage

Where required, COBS 4.12A.18R imposes at least 24 hours between the customer’s request to receive a direct offer financial promotion and its communication. Afterwards, the customer must choose whether to leave or continue, with equally prominent options.

The rule concerns the relevant first communication; it is not a universal waiting period before every trade. handbook.fca.org.uk

Map the precise trigger, timer and access restrictions.

A practical implementation record should include:

1. The event starting the period.
2. Evidence of the timestamp.
3. Content accessible during the period.
4. The end-of-period choice.
5. The customer’s recorded decision.

Explain the waiting period clearly so customers understand where they are in the journey.

Complete categorisation and appropriateness properly

The relevant direct offer conditions include personalised warnings, permitted client categorisation and appropriateness. Categorisation statements must meet the applicable requirements; selecting “experienced investor” is insufficient. References: COBS 4.12A.20R–4.12A.28R. handbook.fca.org.uk

The FCA expects appropriateness assessments to examine knowledge and experience. Where the investment is assessed as inappropriate, the customer must not proceed through the investment journey. FCA

Suggested implementation checks include:

• Questions relevant to the products offered.
• Clear language and plausible answer choices.
• Controls against coaching customers to pass.
• Documented treatment of unsuccessful assessments.
• Reliable records of answers and outcomes.

AML onboarding and an appropriateness assessment serve different purposes. Build both into the journey with clearly assigned responsibilities.

Control influencers, affiliates and social media

The FCA’s FG24/1 addresses financial promotions on social media, including influencer communications. Unauthorised influencers communicating promotions without appropriate approval or an exemption may breach the law. FCA

A sensible campaign process should cover:

• Approved scripts and permitted formats.
• Restrictions on unscripted claims.
• Review of links and calls to action.
• Publication monitoring.
• Escalation and removal procedures.
• Retention of the content actually published.

Short videos, livestreams and disappearing stories should be included in the review.

Provide partners with clear instructions about permitted statements. Monitor their execution, particularly where they improvise product claims or promote incentives.

Maintain evidence that the controls work

The FCA’s review of customer journeys examined cooling-off periods, warnings, categorisation, appropriateness, record keeping and due diligence. It identified weaknesses in implementation despite firms having introduced the required features. FCA

Suggested evidence includes:

Test the entire journey on the devices customers use. Policy wording should match the live system.

How CRYPTOVERSE can support your UK marketing framework

CRYPTOVERSE is a specialist legal and regulatory firm for UK FCA cryptoasset authorisation support.

CRYPTOVERSE can support promotion route assessments, campaign reviews, customer journey analysis and preparation of governance procedures and evidence.

Planning to market crypto products to UK consumers? Contact CRYPTOVERSE to assess your communications and customer safeguards before launch.

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