Some firms are still treating crypto financial promotions as a regulatory work in progress. It isn’t. The rules have been in force since October 2023, the FCA has been enforcing them, and the pace of intervention is increasing. If your marketing hasn’t been reviewed against the regime, that is a gap that needs closing now.
What the Regime Requires
From 8 October 2023, any financial promotion for a qualifying cryptoasset directed at a UK consumer must comply with the FCA’s rules — regardless of where the firm communicating it is based.
Cryptoassets sit within the Restricted Mass Market Investments category, which means the rules are strict. Every promotion must be clear, fair and not misleading. It must carry the FCA’s mandated risk warning in full:
“Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.”
That wording must be prominent — not buried, not reduced, not greyed out.
Beyond the content of the promotion itself, firms must also have the right infrastructure in place. A 24-hour cooling-off period is required for first-time investors before they can receive a direct offer. Appropriateness assessments must be completed before a consumer can proceed. And any incentive tied to investment activity — referral bonuses, sign-up rewards — is prohibited outright.
The promotion must also be communicated through a lawful route. That means it is either made by an FCA-authorised or registered firm, or approved by an authorised person. Overseas firms have no exemption. If a promotion reaches UK consumers, the regime applies.
The FCA Is Already Taking Action
This is not a regime the FCA is monitoring at a distance. It is actively enforcing.
In February 2026, the FCA commenced legal proceedings against HTX — the global crypto exchange formerly known as Huobi — for illegally promoting its services to UK consumers across its website and on TikTok, X, Facebook, Instagram and YouTube. The FCA had already issued a public warning. HTX carried on regardless. The proceedings are significant because HTX is an overseas firm. Being based outside the UK is not a defence.
Before that, the picture was already clear. Across 2024, the FCA recorded 413 cases where firms voluntarily withdrew or amended promotions after regulatory contact, alongside a rise in cases requiring direct intervention. Twenty individuals were interviewed under caution for promoting cryptoassets without authorisation through social media. Several have since faced criminal charges.
The FCA has also flagged a specific risk for registered firms: if you offer on/off ramp services embedded in a third-party app or website via an API widget, and that third party is not itself registered, those promotions may be unlawful — and your firm carries the exposure. Registering with the FCA under the Money Laundering Regulations does not resolve a financial promotions breach.
Where Firms Are Getting It Wrong
The FCA has published its findings from reviewing firms’ compliance. The problems it found are consistent across the sector.
Risk warnings are present but not prominent enough. Cooling-off periods exist on paper but have not been built into the customer journey. Appropriateness assessments are there in form but not in substance — consumers who should be restricted are passing through anyway. Incentive structures that were standard before the regime came into force have not been removed. And social media channels, including those run by affiliates and influencer partners, are operating outside the rules with no oversight from the firm behind the product.
The common thread is the gap between what a compliance policy says and what actually happens when a customer sees a promotion and clicks through.
The Approver Route Has Changed
Firms that have been relying on a section 21 approver to sign off their promotions should be aware that this route has become more restricted. The FCA introduced a financial promotions approval gateway in 2024, requiring authorised firms that approve promotions for companies outside their group to hold specific permission to do so. The number of firms offering this service has reduced, and the scrutiny applied to what gets approved has increased. An approval from a section 21 approver is not a formality — and firms cannot treat it as one.
What a Compliant Framework Looks Like
The firms that are getting this right share some consistent characteristics. Their risk warnings are prominent across every channel, including formats where space is limited. Their customer journey implements the cooling-off period and appropriateness assessment as functioning systems, not policy commitments. Their incentive prohibition has been applied across the full product range. They have visibility over what their partners and affiliates are publishing, with monitoring in place to catch problems before the FCA does. And senior management can account for the financial promotions framework — not just its existence, but how it works.
Compliance here is not about documentation. It is about being able to demonstrate, at any point, that your promotions meet the standard.
Final Thought
The FCA has now spent over two years assessing how firms are responding to this regime. It has published its findings, escalated its enforcement, and taken legal action against an overseas exchange that chose not to engage. The direction of travel is clear.
The right question for your firm is not whether these rules apply. It is whether your current framework would hold up under scrutiny — and if there is any doubt about the answer, the time to address it is now.
| If you want to understand where your financial promotions framework stands, speak to our team.
Email: info@lhiconsult.com | Phone: +44 203 319 5147 | Web: lhiconsult.com |
FAQs
When did the crypto financial promotions regime come into force? The rules came into force on 8 October 2023. A short extension to 8 January 2024 was available for firms needing more time to build certain technical back-end requirements. Full compliance has been required since January 2024.
Do the rules apply to firms based outside the UK? Yes. The regime applies to any financial promotion for a qualifying cryptoasset directed at a UK consumer, regardless of where the firm is based. The FCA’s proceedings against HTX in February 2026 were brought against an overseas firm on exactly this basis.
What happens if a promotion is communicated through a third-party platform or affiliate? The firm behind the product remains responsible. If an affiliate or partner channel is communicating unlawful promotions, the registered firm enabling that access carries the exposure. The FCA expects firms to audit their partners and monitor compliance on an ongoing basis.
We have a section 21 approver in place. Is that enough? It depends. Since the FCA introduced the financial promotions approval gateway in 2024, authorised firms need specific permission to approve promotions for companies outside their group. Fewer firms hold that permission now, and the standard of review has increased. An approval is not a formality and should not be treated as one.
What is the fastest way to assess whether our promotions are compliant? Start with a review of every channel through which your promotions reach UK consumers — your own platforms, social media, affiliate arrangements, and any embedded third-party widgets. Check each against the FCA’s published requirements: prominence of risk warnings, absence of incentives, functioning cooling-off period, appropriateness assessment, and lawful communication route. Where there are gaps, document and remediate them. Specialist support can accelerate that process significantly.