The new regulations aim to ensure that crypto-asset firms' marketing must be clear and fair as well as labelled with prominent risk warnings.

Crypto providers must also apply a 24-hour cooling off period for first time investors to give them time to consider high-risk investments decisions, writes Emily Berry.

The rules will also ban incentives such as bonuses for ‘referring a friend.’

The rules apply to all firms, both UK-based and internationally, when targeting UK investors.

The FCA says it expects businesses, including social media platforms, app stores, search engines, domain name registrars and payment firms, to consider the alerts and play their part in protecting UK consumers from illegal promotions.

Under the new rules, firms wishing to promote crypto-assets in the UK must be authorised and registered by the FCA or have marketing approved by authorised firms.

The FCA will also continue to remind people of the high risk of purchasing crypto-assets, it says.

To follow the new rules, there are four steps the FCA advises crypto-asset firms to take to lawfully communicate crypto-asset promotions:

• An authorised person must communicate the promotion
• An authorised person must approve the promotion
• A crypto firm registered under the Money Laundering Regulations (MLR) must communicate the promotion
• The promotion must comply with any conditions of an exemption in the Financial Promotion Order

The new Financial Promotion rules for crypto-asset marketing support the FCA’s core commitments in its 2023-24 Business Plan.

The watchdog aims to reduce and prevent serious harm caused by illegal crypto promotions. It also wants to set and test higher standards and promote competition and positive change, it says.

The FCA has been ensuring firms are as ready as possible for the new regime by issuing warnings about the impending changes since February so firms were prepared for the changes.

For extra protection, the FCA has advised consumers to check its list of regulated firms when dealing with crypto asset providers and its warning list of unauthorised firms.

The warning list names unauthorised companies which may be illegally communicating crypto-asset promotions and failing to engage with the FCA.

The FCA advises investors to take a risk-based approach, so not all firms of potential concern will appear on the list straight away. Instead, the list will be continually updated when firms are identified, the FCA said.