FCA Handbook - CRYPTO 10.3 Key terms of agreement and express prior consent requirement

You are viewing CRYPTO 10.3 Key terms of agreement and express prior consent requirement as it appeared on 25/10/2027. The current version of CRYPTO 10.3 Key terms of agreement and express prior consent requirement was last updated on 25/10/2027.

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CRYPTO 10.3 Key terms of agreement and express prior consent requirement

(1) A firm must provide a retail client with the key terms of agreement relating to its qualifying cryptoasset staking service.
(2) A firm must obtain the retail client’s express prior consent in relation to the key terms of agreement:
1. (a) each time that retail client instructs the firm to provide the qualifying cryptoasset staking service; and
2. (b) before one of the following, whichever is the earlier:
  1. (i) the retail client is bound by any agreement relating to qualifying cryptoasset staking; or
  2. (ii) the provision of those services.
(3) A firm must provide the key terms of agreement in a durable medium or via a website, mobile application or any other digital medium that the firm may be using in relation to the provision of its qualifying cryptoasset staking service (where it does not constitute a durable medium) where the website conditions are satisfied.
(4) The firm must keep a record of the retail client’s express prior consent that is capable of being produced or reproduced upon the FCA’s request.
(5) The key terms in respect of which a retail client must provide express prior consent must include the terms set out in CRYPTO 10.3.3R.

(1) Where a retail client has provided express prior consent for a firm to use any rewards earned in further qualifying cryptoasset staking, as opposed to rewards being transferred or allocated to the retail client immediately, the firm is not required to obtain the retail client’s express prior consent again in relation to the use of rewards in further qualifying cryptoasset staking.
(2) This is provided the use of any rewards in further qualifying cryptoasset staking is on terms that are the same as, or substantially similar to, the original qualifying cryptoasset staking service.

(1) Where the qualifying cryptoasset staking service involves auto-staking, the requirement in CRYPTO 10.3.1R applies each time the retail client instructs the firm to provide an auto-staking service in respect of future holdings of the retail client’s qualifying cryptoassets.
(2) A firm is therefore not required to obtain additional express prior consent from the retail client in respect of each instance of qualifying cryptoasset staking that the firm arranges from time to time using the retail client’s qualifying cryptoassets as part of that agreed auto-staking arrangement.

Key terms

The terms in respect of which a firm must obtain a retail client’s express prior consent include:

(1) the type and quantity of the qualifying cryptoassets the firm will use in the qualifying cryptoasset staking service for the retail client, including the name of the qualifying cryptoasset and the blockchain on which blockchain validation using that qualifying cryptoasset will take place;
(2) how long the qualifying cryptoassets will be used in the qualifying cryptoasset staking service;
(3) the value of the qualifying cryptoassets the firm will use in the qualifying cryptoasset staking service;
(4) the total and component parts of one-off and ongoing charges, fees and commission, including exit fees, to be paid by the retail client to the firm for the qualifying cryptoasset staking service;
(5) the rewards that may be earned pursuant to the qualifying cryptoasset staking service and transferred to the retail client, including:
1. (a) how rewards are determined;
2. (b) in what qualifying cryptoasset or currency the rewards will be paid;
3. (c) the frequency with which any rewards are earned and whether the value or frequency of rewards is variable; and
4. (d) whether the firm will use any rewards earned in any separate or additional qualifying cryptoasset staking;
(6) any restrictions set by the firm on a retail client’s ability to access their qualifying cryptoassets used in the qualifying cryptoasset staking service or to have the qualifying cryptoasset returned to them, and on their ability to access any rewards earned, including whether any financial penalties may be incurred by the retail client;
(7) whether ownership of the retail client’s qualifying cryptoassets transfers from the retail client to the firm or any other person as part of the qualifying cryptoasset staking service;
(8) whether the retail client’s qualifying cryptoassets used in the qualifying cryptoasset staking service and/or any rewards earned are being safeguarded by the firm or any other person on behalf of the retail client;
(9) what the retail client’s rights are to cancel or withdraw from the qualifying cryptoasset staking service, including:
1. (a) any relevant information on the conditions for exercising the right of cancellation, its duration, and practical instructions for exercising it; and
2. (b) any other information material to a retail client’s understanding in respect of the cancellation of the qualifying cryptoasset staking service;
(10) the type and quantity of any cryptoasset(s) that the retail client may receive as part of the qualifying cryptoasset staking service; and
(11) whether any such cryptoasset(s) referred to in (10) received by the retail client as part of the qualifying cryptoasset staking service confer(s) or represent(s) any rights (including ownership) or obligations with respect to the qualifying cryptoassets used in the qualifying cryptoasset staking service.

(1) Where the qualifying cryptoasset staking service involves auto-staking, in addition to those terms set out in CRYPTO 10.3.4R, the terms in respect of which a firm must obtain a retail client’s express prior consent must include:
1. (a) that the firm will use future holdings of one or more types of qualifying cryptoassets designated by the retail client without needing to seek the retail client’s express prior consent in respect of each instance of qualifying cryptoasset staking; and
2. (b) the type(s) of qualifying cryptoasset(s) the firm will use in the qualifying cryptoasset staking service for the retail client, including the name of the qualifying cryptoasset(s) and the associated blockchain(s) or other network(s) on which the qualifying cryptoasset(s) will be used for blockchain validation.
(2) A firm does not need to obtain the retail client’s express prior consent in relation to:
1. (a) CRYPTO 10.3.4R(1) in respect of the quantity of qualifying cryptoassets that will be used in the qualifying cryptoasset staking service; and/or
2. (b) CRYPTO 10.3.4(R)(3) in respect of the value of the qualifying cryptoassets,
if it is not possible at the outset of the auto-staking service to determine and this.

(1) In relation to CRYPTO 10.3.4R(3), a firm should take all reasonable steps to obtain the most recent valuation for the qualifying cryptoassets that the firm will use in the qualifying cryptoasset staking service.
(2) This value in (1) should be presented in GBP.

(1) In relation to CRYPTO 10.3.4R(4), a firm should:
1. (a) make clear which charges originate from the blockchain, such as gas fees, and which charges are levied by the firm; and
2. (b) present any commission charged by the firm as a percentage of the total rewards earned on a retail client’s qualifying cryptoasset(s) used in the qualifying cryptoasset staking service.
(2) Where the qualifying cryptoasset staking service uses a specified quantity of qualifying cryptoasset(s), a firm should present one-off charges for the qualifying cryptoasset staking service as monetary value and as a percentage of the total value of qualifying cryptoasset(s) used in the qualifying cryptoasset staking service.
(3) Where the qualifying cryptoasset staking service involves auto-staking, a firm should present one-off charges for the use of a retail client’s future holdings of qualifying cryptoassets in qualifying cryptoasset staking as either:
1. (a) a percentage of the total value of qualifying cryptoassets used in the qualifying cryptoasset staking service; or
2. (b) a flat charge,
depending on the methodology used by the firm to calculate the charges.

Material changes

A firm must notify a retail client in good time about any material change to the key terms of agreement provided under CRYPTO 10.3.1R(1) relevant to the qualifying cryptoasset staking service that the firm is providing to that retail client.

When considering its approach to preparing and providing key terms of agreement and obtaining express prior consent in respect thereof, as well as its approach to notifications about material changes to key terms, a firm should take into account obligations in the Handbook that may be relevant, including but not limited to the Consumer Duty and obligations elsewhere in PRIN and in COBS, as well as obligations in consumer rights law and any associated and applicable guidance.

Point In Time

25/10/2027