Financial Promotions Regime For Cryptoassets

Question 1

What is a qualifying cryptoasset?

Answer 1

1. A digital asset that is secured using cryptography –
   A. Represents value or contractual rights.
   B. Can be transferred, and is fungible (meaning each unit is interchangeable with another of the same kind).
2. Includes major cryptocurrencies – Examples are Bitcoin, Ethereum, and similar fungible digital assets.
3. Excludes certain types of crypto assets – A. E-money (electronic money regulated separately).
   B. Existing controlled investments (such as securities or derivatives).
   C. Fiat currency (government-issued money like USD or EUR).
   D. Most non-fungible tokens (NFTs), since they are unique rather than interchangeable.

Question 2

What are some of the rules and regulations around a financial promotion relating to qualifying cryptoassets?

Answer 2

1. They can only be communicated by an FCA -authorised firm, by an unauthorised firm where the communication has been approved by an authorised firm or where an exemption applies
2. This applies to communications relating to dealing, arranging, managing or advising in relation to qualifying crypto assets
3. FCA has categorised cryptoassets as a specific type of high risk investment. (comes under restricted mass market investment)