Around the world, regulators are pushing forward in their attempts to temper — and in some cases, explicitly ban — the promotion of cryptoassets to retail consumers. In particular, regulators are wary of the rise in `fin-fluencing', whereby celebrities and social media personalities are paid to promote investment in certain crypto products.

UK developments

In the UK, cryptoasset promotions are currently outside the FCA's remit —  but not for long.

In January 2022, HM Treasury (HMT) confirmed its intention to legislate to bring certain cryptoassets within scope of the Financial Promotions Order. Shortly afterwards, the FCA published CP22/2 laying out strengthened rules for financial promotions of high-risk investments including cryptoassets. These rules were refined in PS 22/10, with the FCA noting that final rules for cryptoassets would be confirmed once the legislative process was complete (likely later in 2023).

In CP22/2, the FCA reiterated its aim of maintaining a technology-neutral approach and treating cryptoassets like any other high-risk investment. It proposed to define cryptoassets as a Restricted Mass Market Investment (RMMI). Under this definition, the promotion of cryptoassets would need to comply with various additional stipulations, including:

  • Improved risk warnings including the standardised phrase — `Don't invest unless you're prepared to lose the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong'
  • Banning of incentives to invest (e.g. refer a friend, new joiner bonus)
  • A 24-hr cooling off period
  • Personalised risk pop ups
  • Support for clients to accurately categorise themselves — e.g., stating their income if they declare themselves to be a 'high-net-worth' investor. In CP22/2, the FCA indicated that the self-certified 'sophisticated investor' category — one of four client categories — would not be permitted for the promotion of cryptoassets
  • Processes to record metrics relating to the effectiveness of client categorisation and appropriateness assessments


These stipulations would apply to all firms marketing cryptoassets to UK consumers regardless of whether the firm was based overseas or what technology was being used to make the promotion and will be a step change from the currently very minimal requirements.

In February 2023, the FCA published a reminder to all cryptoasset firms that they must be preparing for the changes. It also emphasised that robust action would be taken against any firm in breach of the new requirements.

The requirements of the Financial Promotions Order mean that any entity intending to promote cryptoassets need to have their promotions approved by an FCA-authorised firm. Industry feedback highlighted that most crypto firms would be unable to approve their own promotions as they are not authorised by the FCA, and that there is a lack of suitably authorised firms in the market willing and able to step in. This would result in an effective ban on cryptoasset financial promotions which HMT has stated was not the intended outcome of the legislation.

As HMT is committed to supporting the growth of the UK cryptoasset sector in a safe and competitive manner, it has now introduced secondary legislation that enacts a temporary bespoke exemption allowing cryptoasset firms that are registered with the FCA under AML/CFT regulations to communicate their own cryptoasset promotions. However, the exemption will not allow them to promote other controlled investment products. Firms using the exemption will still have to comply with the rules described above on the content of the promotions.

More recently, in April, the FCA and ASA also published a joint-press release warning fin-fluencers of the risks of promoting illegal ‘get rich quick’ schemes and noting that they will be engaging with influencers and their agents, providing them with clear information about what could be an illegal financial promotion.

Further afield

As things stand, while Europe's Markets in Cryptoasset (MiCA) regulation works its way through the legislative process, there is no EU-wide regulatory approach for the promotion of crypto products. As a result, individual countries have begun taking action to address risks within their own borders. Spain was one of the first. New rules — set out by the National Securities Market Commission (CNMV) — came into force in February, and include:      

  • A requirement that influencers disclose if they are being remunerated for promoting crypto  
  • A requirement for posts to include prominent clear, balanced and impartial risk statements   
  • A requirement that influencers with more than 100,000 Spanish followers notify the watchdog of the content of any crypto promotions at least 10 days in advance 

And in Belgium, the Financial Services and Markets Authority (FSMA) has finalised rules regarding the retail promotion of crypto assets (including by influencers), which will come into force in May. These rules include requirements such as emphasising the potential risks, presenting information in `non-technical' language and avoiding `irrelevant comparisons'. The FMSA has even coined a bespoke tagline — “virtual currencies, real risks — the only guarantee in crypto is risk” — which must be included in all relevant advertisements. Representatives of the European Commission have noted that some of these rules may need to be adjusted once MiCA enters into force in 2024.

A recent report by the International Organisation of Securities Commissions (IOSCO) on retail market conduct noted that the current use of social media by registered entities is characterised by overly promotional and unbalanced information. However, if used responsibly, this new medium has the potential to provide important information to a new demographic of investors that access these channels.

What does this mean?

As requirements continue to proliferate, firms must ensure that their marketing practices remain compliant with jurisdictional expectations in order to avoid fines, regulatory backlash and reputational damage. 

How can KPMG help?

Cryptoasset firms marketing to UK customers should be getting their processes and frameworks ready in order to start preparing and approving their financial promotions in line with these new rules. A financial promotions framework will be key to ensure the right processes are followed, suitable training is offered to the relevant staff and promotions are compliant. KPMG firms have extensive experience of supporting the build of financial promotions frameworks augmented by technology.  Please contact us below to find out more about the services KPMG firms offer.

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