- Latest data shows only two firms applied for crypto registration in August
- Only one month remains before strict marketing regime takes effect
The UK financial promotion regime will capture marketing of cryptoassets to UK customers from 8 October 2023. Crypto firms that are registered with the Financial Conduct Authority may continue to market their services in the UK after this date. Despite this upcoming deadline, the FCA has not yet seen a surge of applications for registration.
Latest data shows that the FCA only received two applications for cryptoasset registration in the month up to 1 September 2023. Two (presumably unrelated) applications were also withdrawn in that period. Six firms have been successfully registered in the last 12 months.
This raises questions about how crypto firms are getting ready for changes to crypto marketing rules in the UK. Many expected a rush to register with the FCA before changes to financial promotion legislation takes effect. Registration is one way to legally promote cryptoasset promotions to UK clients after 8 October 2023, though other routes are available.
Marketing crypto services
Once the financial promotion regime applies to cryptoassets, four routes will be available for communicating cryptoasset promotions in the UK. These are that the communication is:
- made by an authorised firm (i.e. a firm that is regulated by the FCA under the Financial Services and Markets Act 2000, such as a bank or investment firm),
- approved by an authorised firm (which is then required to ensure that the content of the promotion remains fair, clear and not misleading throughout its lifetime),
- made by a cryptoasset business which is registered with the FCA, or
- otherwise benefits from an exemption (e.g. for marketing directed to investment professionals or high net worth companies, though exemptions are unlikely to benefit general marketing to UK retail customers).
Registration with the FCA allows crypto firms to continue to advertise their services after the extended financial promotions regime takes effect. This may encourage more firms to apply.
Registering with the FCA
Even a last minute application may not be enough. The FCA can take up to three months to assess registration applications. The “clock” only starts once the FCA is satisfied that it has received a complete application with all the information it needs.
Bottom line: Firms will need to submit high quality applications as soon as possible to minimise any period of disruption and may want to consider exemptions or approval by an authorised person for the period during which the FCA is considering the application.