The rule.
COBS 4.12A.20R:
“A firm must not offer to any retail client, in connection with a qualifying cryptoasset, an incentive to invest. This includes, but is not limited to:
(a) any monetary or non-monetary benefit conditional on investment;
(b) any refer-a-friend or new-joiner bonus;
(c) any matched deposit or matched trade promotion;
(d) any free cryptoasset offer conditional on signup, deposit or trading.”
Refer-a-friend is a fintech staple — Monzo, Revolut, Wise all run one. Crypto is different: the FCA’s view is that incentives push consumers into a high-risk product against their interest.
What it requires.
No new-investor incentives. No “sign up and get $10 in BTC.” No “deposit $100, we’ll match $20.” No free token for a first trade.
No referral incentives. No “refer a friend, you both get $20” in UK funnels.
No conditional benefits. No tier upgrades or perks conditional on investing — conditionality triggers the ban.
Common violations.
“Get $10 in BTC when you complete KYC and make your first trade.”
Direct violation of 4.12A.20R(a) and (d). The most common UK-facing growth-funnel finding.
“Refer a friend. You both get £15 when they make their first trade.”
Direct violation of 4.12A.20R(b).
“Reach VIP tier with $50k monthly volume. Lower fees, exclusive support, early access to new listings.”
Fee reductions for volume are sometimes defensible; perks like “early access” are harder to defend.
“Deposit ETH this month, eligible for the [Token] airdrop.”
Conditionality on investment activity makes it an incentive.
How to comply.
Exclude UK IPs, KYC residents, and accounts from every conditional-benefit mechanic at the campaign-engine level, not just at display time.
Levers that work: lower fees, better UX, education, faster support — benefits not conditional on investing.
Per-signup or per-trade payouts for UK consumers are in scope. Move UK affiliate compensation to per-visitor (CPC), or exclude the UK.
Every lifecycle email, push, or in-app message with an incentive needs UK suppression. Build the segments once; apply everywhere.
Related rules.
-
Pillar one of the UK regime.
-
Pillar two.
-
Pillar three.