GC23/1 Cryptoasset financial promotions: Guidance for firms

Concurrent to the publication of a final policy statement (PS23/6) as regards financial promotion rules for cryptoassets (please see EventID 21585 for a detailed description), the Financial Conduct Authority (FCA) has published a consultation on a newly proposed guidance (GC23/1) in same context. The guidance aims to assist firms in developing promotions that are „fair, clear, and not misleading“ and sets out criteria that may be considered in this context. Such criteria include, but are not limited to the following:
– promotion wording: can the promotion be easily understood and is the wording aligned with the target’s market assumed level of comprehension?
– balanced view: does the promotion provide a balanced view on the risks and opportunities of the cryptoasset?
– truthfulness and accuracy of the data: is the used data truthful and can be verified?
– disclosure of costs and fees: are ALL fees and costs that may impact the return on investment disclosed in the promotion?
The guidance would thereby distinguish between various types of cryptoassets, namely
– those that are considered somewhat „stable“ because their value is tied to a referenced fiat currency (stablecoins);
– those that are backed by a commodity or asset;
– those with complex yield cryptoasset models; and
– all others.
Finally, the guidance would cover some general issues as regards the promotion of cryptoassets, including the promotion via social media, the due diligence measures firms are expected to take before a financial promotion is communicated, and certain disclosures firms are expected to make in their promotions (e.g. a firm’s legal status).
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The guidance is open for public comment up to August 10, 2023.