Overview
The Financial Conduct Authority (“FCA”) has published Guidance Consultation GC26/2 (“GC26/2”), setting out clear expectations on how firms undertaking regulated cryptoasset activities must apply the Consumer Duty. While the cryptoasset market offers innovation and growth opportunities, its complexity, volatility and unfamiliar terminology create unique challenges for consumer understanding and protection.
GC26/2 supplements the existing Finalised Guidance (“FG22/5”) and clarifies how the Duty applies across cryptoasset business models, from manufacturers and distributors to UK Qualifying Cryptoasset Trading Platform (“QCATP”) operators. As the UK crypto regulatory perimeter expands, firms must integrate the Duty into product design, distribution, communications, pricing and support to avoid foreseeable harm and deliver fair value.
Key Developments
Scope of the Consumer Duty in the Cryptoasset Regime
The Duty applies to all retail market business involving UK retail customers. It covers authorised firms carrying out regulated cryptoasset activities (dealing, arranging, operating platforms, custody, lending/borrowing, staking) and financial promotions where a retail customer is involved.
Key nuances in the application of Consumer Duty in the Cryptoasset regime, as outlined in the GC26/2 include:
- The term ‘manufacturer’: Cryptoasset manufacturers (e.g., issuers of qualifying stablecoins or operators of lending services) are generally subject to the Duty where they are UK-authorised and products are offered to retail customers.
- The term cryptoasset ‘distributor’: For cryptoasset firms, examples of distributors include cryptoasset intermediaries selling qualifying cryptoassets and UK QCATPs offering qualifying cryptoassets on their platform. Distributors are expected to take reasonable steps to deliver good outcomes even where the manufacturer is unregulated or overseas.
- UK QCATP operators must comply with both the Duty and sector-specific rules. The Duty does not apply to trades executed on the platform itself but does apply to marketing, distribution, and customer interactions.
- The Admissions and Disclosures (“A&D”) regime for qualifying cryptoassets (other than UK stablecoins) is excluded from the Duty, but bespoke A&D rules are designed to align with consumer understanding outcomes.
Cross-Cutting Rules Tailored to Cryptoassets
The GC26/2 emphasises crypto-specific guidance on the appropriate alignment with the three cross-cutting rules under the Duty, across the four outcomes, including (but not limited to):
- Avoiding misleading features (e.g., hidden fees, complex redemptions, gas-fee surges at execution).
- Transparent communication about risks outside the firm’s control (e.g., withdrawal delays from cold storage).
- Not exploiting behavioural biases or vulnerability (e.g., targeting high-risk products at customers with low financial literacy).
- Providing tools such as profit/cost calculators, LTV models, and scenario illustrations to help customers align products with their objectives.
The Four Outcomes with Cryptoasset Guidance
The GC26/2 also outlined crypto-specific guidance on practical examples of good and poor practices, so that firms can benchmark their approaches and comply with the Duty’s four outcomes:
- Products and Services: Manufacturers must define granular target markets; distributors must assess suitability where manufacturer information is limited or absent.
- Price and Value: Firms must assess fair value of charges they control (trading spreads, custody fees, staking commissions), even where underlying asset prices are volatile and outside their control.
- Consumer Understanding: Communications must use plain language, layered disclosures, and testing to ensure customers grasp risks and features.
- Consumer Support: Support must be timely, accessible and friction-free (e.g., straightforward withdrawals, clear escalation routes during outages or slashing events).
Importance of Compliance and Applicable Regulations
The GC26/2 should be read in conjunction with the FCA’s FG22/5 and FG21/1 on vulnerable customers. The guidance does not create new rules but clarifies how existing obligations apply in a crypto context. It applies on top of sector-specific rules in the new Crypto Sourcebook and the Market Abuse Regime for Cryptoassets.
Firms undertaking, or seeking authorisation for, cryptoasset activities must be able to demonstrate how they will deliver good customer outcomes in line with Principle 12 (Consumer Duty) and associated cross-cutting rules.
Regulatory Implications and Compliance Lessons
The FCA’s expectation is that cryptoasset firms embed the Consumer Duty from the outset. Key considerations include:
- Define granular target markets and distribution strategies that reflect product complexity and customer vulnerability.
- Conduct robust fair-value assessments focused on controllable charges and non-financial costs.
- Test communications for genuine understanding and avoid jargon or behavioural exploitation.
- Design support journeys with minimal friction, especially for custody, withdrawals, and high-risk events.
- Document decision-making and evidence compliance across the customer lifecycle.
A Wake-Up Call for Crypto Firms
As the UK crypto regulatory perimeter expands, the Consumer Duty is not optional, rather it is central to authorisation and ongoing supervision. Firms that treat the Duty as a box-ticking exercise risk regulatory challenge, customer harm, and loss of trust. Those that embed it thoughtfully will differentiate themselves in a maturing market.
How Complyport Can Help
Complyport offers tailored solutions to help cryptoasset firms embed the Consumer Duty and prepare for FCA authorisation. Our services include:
- Consumer Duty gap analyses and implementation support;
- Target market and fair-value assessment frameworks;
- Product governance and distribution strategy reviews;
- Communications testing and plain-language guidance;
- Vulnerable customer policies and support journey design; and
- Full authorisation application support and regulatory readiness.
By combining regulatory expertise with practical industry experience, Complyport helps firms manage complex regulatory requirements and prepare for the UK’s evolving cryptoasset regulatory landscape.
Book a Meeting with a Complyport SME
To ensure your cryptoasset business meets FCA expectations under GC26/2 and delivers good customer outcomes, book a consultation with a Complyport Subject Matter Expert today.
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The FCA’s GC26/2 provides practical guidance on how the Consumer Duty applies to crypto firms. From defining the right target markets and delivering fair value, to making sure customers truly understand what they’re buying and get proper support.
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