UK FCA webpage on the use of s.21 approvers by cryptoasset firms

The UK Financial Conduct Authority (FCA) has published a new webpage with information for cryptoasset firms that are currently using the services of an FCA-authorised firm to approve their cryptoasset financial promotions. Cryptoasset firms that are not authorised under the Financial Services and Markets Act 2000 (FSMA) or registered with the FCA under The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) (including overseas firms) may use FCA-authorised firms to approve their cryptoasset financial promotions (referred to as an s.21 approver) for communication to UK consumers. The webpage sets out information on the use of s.21 approvers ahead of the UK's new crypto regime coming into force on 25 October 2027:

• Cryptoasset firms that apply for authorisation during the application period—Cryptoasset firms using an s.21 approver and applying for authorisation (or variation) during the application period, which runs from 30 September to 28 February 2027, may continue to use their existing s.21 approver until their application is determined (including during any period in the saving provision).
• Cryptoasset firms that do not apply for authorisation during the application period—Cryptoasset firms using an s.21 approver that do not apply during the application period may continue to use their existing s.21 approver until the new cryptoasset regime comes into force. From this date, if the firm's application has not been determined, it will enter the transitional provision and only be allowed to communicate promotions to pre-existing contracts. These promotions will not require an s.21 approver.
• Cryptoasset firms that do not apply for authorisation before the new regime commences—Cryptoasset firms that rely on an s.21 approver and do not apply for authorisation (or variation) before the new regime, must run-off their UK cryptoasset business before the new regime commences. Firms that fail to do this risk conducting unauthorised business and breaching the general prohibition or acting without permission under FSMA.
• Use of an s.21 approver by authorised cryptoasset firms—Where a cryptoasset firm is authorised by the FCA under FSMA, it can communicate its own financial promotions and does not need a separate s.21 approver. An authorised firm can also approve a promotion from an unauthorised entity in the same group without needing s.21 approver status.

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