Treasury feeds back on cryptoasset promotions

Treasury has published its response to consultation on cryptoasset promotions. In summary, and in line with the decision to regulate crypto-related activities, the Government will bring promotions of cryptoassets within the scope of the financial promotion regime, and will:

• introduce a new definition of “qualifying cryptoasset”;
• amend several of the “controlled activities” for FPO purposes to include cryptorelated activities (specifically dealing, arranging, managing, advising and agreeing to carry on the relevant activity) but will not add any additional activities (such as operating exchange or ATMs); and
• apply the FPO exemptions consistently to cryptoassets as to other controlled investments, and will introduce a new exemption to confirm that a promotion that merely states the vendor is willing to accept or offer qualifying cryptoassets in exchange for goods and services will not be a financial promotion. The Government does not consider that the HNWI and self-certified SIs exemptions would apply because they apply only in relation to specified investments of which qualifying cryptoassets will not be one.

Treasury and FCA will work together on the new FPO regime, and will include a transitional period of around 6 months from finalisation to application.