Crypto Firms Need Improvement

The FCA advises all firms to review both the examples of good and poor practice provided, as well as the previously issued guidance. The report also noted that some firms have relied on industry comparisons to determine acceptable practices.

Given the identified issues, the FCA expects firms to engage directly with the authority to enhance sector-wide standards.

Firms responsible for financial promotions are required to have strong systems and controls in place to ensure compliance. The FCA has warned that failure to improve will result in regulatory action.

Additionally, compliance with the financial promotions regime will be considered in any future authorization applications under the new financial services regulatory framework for cryptoassets.

The FCA will continue to collaborate with the industry on this and other aspects of the evolving crypto regime. Firms must register with the FCA if they provide services that fall under money laundering regulations, such as cryptoasset exchanges, peer-to-peer providers, ICOs, and custodian wallet providers.