FCA Financial Promotions: Cryptoasset Rules (COBS 4.12B)
Cryptoasset Promotion Rules [COBS 4.12B]
Rule: Since October 2023, cryptoasset promotions to UK consumers must comply with FCA rules, regardless of where the promoter is based.
Effective date: 8 October 2023
Who can promote cryptoassets?
| Route | Details | Citation |
|---|---|---|
| FCA authorised firm | Authorised for crypto activities | FSMA s21 |
| Approved by authorised firm | Must be approved by FCA-authorised person | FSMA s21(2)(b) |
| Registered cryptoasset business | Registered under MLRs with FCA | FPO Art 73ZA |
| Exempt under FPO | Limited exemptions (e.g., high net worth) | FPO |
Required risk warnings [COBS 4.12B.5]
All cryptoasset promotions must include:
| Warning | Required wording | Citation |
|---|---|---|
| Capital at risk | ”Don’t invest unless you’re prepared to lose all the money you invest” | COBS 4.12B.5R |
| No protection | ”This is a high-risk investment and you should not expect to be protected if something goes wrong” | COBS 4.12B.5R |
| Take time | ”Take 2 mins to learn more” (with link to risk summary) | COBS 4.12B.6R |
24-hour cooling off [COBS 4.12B.10]
{#cooling-off}
| Requirement | Details | Citation |
|---|---|---|
| New customers | Must have 24-hour cooling off period | COBS 4.12B.10R |
| Purpose | Time to consider risk warnings and information | COBS 4.12B.10R |
| Cannot bypass | Firm cannot allow earlier access | COBS 4.12B.10R |
Client categorisation [COBS 4.12B.7-9]
| Category | Treatment | Citation |
|---|---|---|
| Restricted investor | Self-certify, 10% net assets limit | COBS 4.12B.7R |
| High net worth | £100k+ income or £250k+ assets | COBS 4.12B.8R |
| Certified sophisticated | Certificate from FCA authorised person | COBS 4.12B.9R |
Incentives ban [COBS 4.12B.4]
| Prohibited | Details | Citation |
|---|---|---|
| Refer a friend bonuses | Cannot offer incentives for referrals | COBS 4.12B.4R |
| Sign-up bonuses | Cannot offer bonuses for opening accounts | COBS 4.12B.4R |
| Trading bonuses | Cannot offer bonuses for trading activity | COBS 4.12B.4R |
Source Text
COBS 4.12B.1R: This section applies to a qualifying cryptoasset promotion.
COBS 4.12B.4R: A firm must not communicate or approve a direct offer financial promotion relating to a qualifying cryptoasset that offers any monetary or non-monetary incentive to invest in qualifying cryptoassets.
COBS 4.12B.5R: A qualifying cryptoasset promotion must contain the following risk warning:
“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. Take 2 mins to learn more.”
COBS 4.12B.10R: Where a firm communicates or approves a direct offer financial promotion of a qualifying cryptoasset to a person who has not previously entered into an agreement to buy a qualifying cryptoasset using the services of the firm, the firm must have a procedure requiring that person to wait at least 24 hours between: (1) requesting to receive a direct offer financial promotion…and (2) the firm sending the relevant direct offer financial promotion to the person.
Citation
COBS 4.12B | FCA Cryptoassets Guidance