You are viewing CRYPTO 3.2 Due diligence by retail UK QCATP operators before admission to trading as it appeared on 25/10/2027. The current version of CRYPTO 3.2 Due diligence by retail UK QCATP operators before admission to trading was last updated on 25/10/2027.

CRYPTO 3.2 Due diligence by retail UK QCATP operators before admission to trading

Pre-admission assessment of likelihood of detriment to the interests of retail investors

25/10/2027R

A retail UK QCATP operator may only admit a qualifying cryptoasset to trading on the retail UK QCATP if it is reasonably satisfied the admission to trading of the qualifying cryptoasset is not likely to be detrimental to the interests of retail investors.

25/10/2027R

CRYPTO 3.2.1R does not apply to the admission to trading of a qualifying cryptoasset on a retail UK QCATP if:

  1. (1) the qualifying cryptoasset is a UK qualifying stablecoin; or
  2. (2) retail investors able to trade in qualifying cryptoassets on the retail UK QCATP will not be able to trade in that particular qualifying cryptoasset on the retail UK QCATP directly or through intermediaries.
25/10/2027R

A retail UK QCATP operator must take reasonable steps to identify and obtain sufficient information to enable it to carry out the assessment required by CRYPTO 3.2.1R.

25/10/2027G
  1. (1) The FCA expects the assessment required by CRYPTO 3.2.1R:
    1. (a) to be carried out whether or not the qualifying cryptoasset is already admitted to trading on another retail UK QCATP;
    2. (b) to be carried out in a risk-based and proportionate way; and
    3. (c) to take account of any information available to the retail UK QCATP operator up to the admission to trading of the qualifying cryptoasset concerned.
  2. (2) When judging if a retail UK QCATP operator has complied with CRYPTO 3.2.1R, the FCA will take into account whether it has followed a robust and documented process. However, following such a process will not, by itself, be determinative. The retail UK QCATP operator should also be able to demonstrate in each case the basis on which it was reasonably satisfied for the purposes of CRYPTO 3.2.1R that the admission to trading of a qualifying cryptoasset on the retail UK QCATP was not likely to be detrimental to the interests of retail investors.

Criteria for pre-admission assessment of likelihood of detriment to the interests of retail investors

25/10/2027R

A retail UK QCATP operator must establish criteria for assessing if the admission to trading of a qualifying cryptoasset on the retail UK QCATP is likely to be detrimental to the interests of retail investors which:

  1. (1) are risk-based and objective; and
  2. (2) take into account at least the following factors:
    1. (a) the integrity and reputation of:
      1. (i) the person who created the qualifying cryptoasset (where known);
      2. (ii) any person on whose behalf the qualifying cryptoasset was created (where known);
      3. (iii) the person requesting the admission to trading of the qualifying cryptoasset on the retail UK QCATP; and
      4. (iv) where an offer of a qualifying cryptoasset to the public is made in connection with the admission to trading of the qualifying cryptoasset on the retail UK QCATP, any other person responsible for the offer;
    2. (b) the resilience, technical functionality and credibility of the governance and operational arrangements for the qualifying cryptoasset;
    3. (c) any known risks associated with the underlying technology of the qualifying cryptoasset such as the distributed ledger infrastructure, smart contracts, or other material aspects of its protocol or ecosystem that may affect its security, functionality or continuing viability;
    4. (d) the ability of the persons responsible under regulation 14 of the Cryptoassets Regulations and CRYPTO 3.6.3R for the QCDD and any supplementary disclosure documents to be published under CRYPTO 3.3 in connection with the admission to trading of the qualifying cryptoasset to pay compensation if required to do so by regulation 14 of the Cryptoassets Regulations; and

    5. (e) whether information obtained by the retail UK QCATP operator to carry out the assessment required by CRYPTO 3.2.1R can be verified and, if not, how this may affect the interests of retail investors.

       

25/10/2027G

Matters relevant to the integrity and reputation of a person mentioned in CRYPTO 3.2.5R(2)(a) include, but are not limited to:

  1. (1) any contravention by those persons of CRYPTO 3.5.5R, CRYPTO 3.5.6R or CRYPTO 3.11.1R;
  2. (2) any relevant legal proceedings or regulatory action; and
  3. (3) any relevant publicly available information, such as adverse media reports.
25/10/2027R

A retail UK QCATP operator must ensure its admission criteria are:

  1. (1) approved by its governing body;
  2. (2) applied consistently;
  3. (3) regularly reviewed and, where appropriate, updated by its governing body; and
  4. (4) published on its website.

Measures to mitigate risks of conflicts of interest

25/10/2027R

A retail UK QCATP operator must put in place measures to ensure its admission criteria are not applied less rigorously or objectively where:

  1. (1) the retail UK QCATP operator proposes to admit a qualifying cryptoasset to trading of its own motion; or
  2. (2) a member of the retail UK QCATP operator’s group requests the admission to trading of a qualifying cryptoasset.
25/10/2027R

A retail UK QCATP operator must include, in the measures required by CRYPTO 3.2.8R, written policies to:

  1. (1) ensure separation between the parts of the business responsible for commercial decisions relating to the admission to trading of the qualifying cryptoasset and those responsible for carrying out the assessment required by CRYPTO 3.2.1R; and
  2. (2) ensure that individuals responsible for commercial decisions relating to the admission to trading of the qualifying cryptoasset are not responsible for carrying out the assessment required by CRYPTO 3.2.1R.
Point In Time
25/10/2027