The UK's Financial Conduct Authority has flagged the need for crypto firms to read up on new marketing rules after it recently reviewed several crypto firms’ compliance with certain financial promotion rules designed to help people better understand the risks of investing in crypto.

The regime, introduced in October 2023, followed detailed consultation and a change in legislation.

This review looked at how firms are implementing personalised risk warnings, the 24-hour cooling off period, client categorisation and appropriateness assessments.

The statement said: "We recognise this is the first set of rules for all crypto firms marketing to UK consumers and adjusting to new regulation can be challenging.

"Firms have requested additional clarity on our expectations for these rules. We want to work collaboratively with the sector to raise standards and this publication will help firms meet their obligations and support consumers in making informed decisions.

"We found some examples of firms demonstrating good practice which we have shared in our good and poor practice to help firms get their compliance with the rules right.

"However, we also found multiple instances where firms did not meet the required standards."

The FCA further said that where it identified concerns, it had worked extensively with individual firms to make significant improvements in line with the regulator objectives. "But more work needs to be done to improve compliance", it said.

"We urge all firms to read our good and poor practice, as well our previously published guidance GC23/1 (PDF).

We have seen firms relying on industry comparisons to benchmark what is acceptable. Given the levels of poor practice in the market, firms should not be doing this. Instead, we expect firms to engage with us directly to drive up standards across the sector.

"All firms communicating or approving financial promotions must make sure they have strong systems and controls for compliance in place.

"If firms do not improve, we will act. We will also consider firms’ compliance with regulatory requirements, including the financial promotions regime, as part of any application to be authorised under the future financial services regulatory regime for cryptoassets.

"We will continue to work with industry on this and other parts of the current an upcoming crypto regime."