You are viewing CRYPTO 9.3 Key terms of agreement and express prior consent requirement as it appeared on 25/10/2027. The current version of CRYPTO 9.3 Key terms of agreement and express prior consent requirement was last updated on 25/10/2027.

CRYPTO 9.3 Key terms of agreement and express prior consent requirement

The express prior consent requirement

25/10/2027R
  1. (1) A firm must provide a retail client with the key terms of agreement relating to its qualifying cryptoasset lending or borrowing services.
  2. (2) A firm must obtain the retail client’s express prior consent in relation to those key terms of agreement:
    1. (a) each time that retail client instructs the firm to provide the qualifying cryptoasset lending or borrowing services; and
    2. (b) before one of the following, whichever is the earlier:
      1. (i) the retail client is bound by any agreement relating to the qualifying cryptoasset lending or borrowing services; or
      2. (ii) the provision of those services.
  3. (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 lending or borrowing service (where it does not constitute a durable medium) where the website conditions are satisfied.
  4. (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. (5) The key terms in respect of which a retail client must provide express prior consent must include the terms set out in CRYPTO 9.3.3R.
25/10/2027G
  1. (1) Where a retail client has provided express prior consent for a firm to use any yield earned in further qualifying cryptoasset lending, as opposed to yield 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 yield in further qualifying cryptoasset lending.
  2. (2) This is provided the use of any yield in further qualifying cryptoasset lending is on terms that are the same as, or substantially similar to, the original qualifying cryptoasset lending service.

Key terms

25/10/2027R

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

  1. (1) the type and quantity of the qualifying cryptoassets the firm will provide or receive as part of the qualifying cryptoasset lending or borrowing service for the retail client;
  2. (2) how long the qualifying cryptoassets will be engaged in the qualifying cryptoasset lending or borrowing service;
  3. (3) the value of the qualifying cryptoassets the firm will provide or receive as part of the qualifying cryptoasset lending or borrowing service;
  4. (4) the duration of the loan of qualifying cryptoassets to or from the retail client and whether that duration is fixed or flexible;
  5. (5) 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 or any third parties for the qualifying cryptoasset lending or borrowing service;
  6. (6) in relation to qualifying cryptoasset lending only, the treatment of yield that may be earned and transferred to the retail client;
  7. (7) in relation to qualifying cryptoasset borrowing only:
    1. (a) the amount of qualifying cryptoasset borrowing collateral that must be provided by the retail client;
    2. (b) the amount of interest payable by the retail client, if any;
    3. (c) the firm’s ability to supplement the retail client’s qualifying cryptoasset borrowing collateral on the retail client’s behalf pursuant to CRYPTO 9.6.4R;
    4. (d) the firm’s ability to realise the qualifying cryptoasset borrowing collateral; and
    5. (e) the loan limits set by the firm pursuant to CRYPTO 9.8.1R(1) or by the retail client pursuant to CRYPTO 9.8.5R;
  8. (8) any restrictions set by the firm on a retail client’s ability to access their qualifying cryptoassets or equivalent qualifying cryptoassets provided or received as part of the qualifying cryptoasset lending or borrowing service;
  9. (9) the retail client’s ability to terminate the qualifying cryptoasset lending or borrowing service and receive a return of their qualifying cryptoassets or equivalent qualifying cryptoassets and any yield earned or qualifying cryptoasset borrowing collateral provided, including whether any financial penalties may be incurred by the retail client;
  10. (10) the amount of time the firm requires to restore the retail client’s access to their qualifying cryptoassets or equivalent qualifying cryptoassets and any accrued yield and/or qualifying cryptoasset borrowing collateral provided, following receipt of a request to terminate the qualifying cryptoasset lending or borrowing service;
  11. (11) 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 lending or borrowing service;
  12. (12) whether the retail client’s qualifying cryptoassets engaged in the qualifying cryptoasset lending or borrowing service and/or any yield earned are being safeguarded on trust by the firm or any other person on behalf of the retail client; and
  13. (13) whether any qualifying cryptoasset borrowing collateral provided by the retail client is safeguarded on trust by the firm or any other person on behalf of the retail client.
25/10/2027G
  1. (1) In relation to CRYPTO 9.3.3R(3), a firm should take all reasonable steps to obtain the most recent valuation for the qualifying cryptoassets that will be engaged in the qualifying cryptoasset lending or borrowing service.
  2. (2) This value referred to in (1) should be presented in GBP.
25/10/2027G

In relation to CRYPTO 9.3.3R(5), a firm should:

  1. (1) present one-off charges and fees for the qualifying cryptoasset lending or borrowing service as both a monetary value in GBP and as a percentage of the total value of qualifying cryptoassets engaged in the qualifying cryptoasset lending or borrowing service;
  2. (2) in presenting the information in (1), take all reasonable steps to obtain the most recent valuation of those qualifying cryptoassets and express the monetary value of the charge or fee;
  3. (3) set out what fees and charges may be payable to third parties, including gas fees and settlement fees;
  4. (4) make clear which charges originate from the blockchain, such as gas fees, and which charges are levied by the firm; and
  5. (5) explain how any fees, charges or interest rates (if applicable) may vary through the duration of the qualifying cryptoasset lending or borrowing service and how such variations will be communicated to the retail client.
25/10/2027R

In relation to CRYPTO 9.3.3R(6), the terms must include:

  1. (1) what the applicable rate of yield is and how it is determined;
  2. (2) in the case of a variable rate, how that rate is calculated and how any variations will be communicated to the retail client;
  3. (3) in what qualifying cryptoasset or currency the yield will be paid or provided to the retail client;
  4. (4) the frequency with which yield may be earned and paid or provided to the retail client and, if the frequency is variable, on what basis it will vary;
  5. (5) what commission the firm will take, presented as a percentage of the total yield earned; and
  6. (6) whether:
    1. (a) any yield earned is transferred to the retail client or safeguarded for the retail client;
    2. (b) the firm is permitted to use or re-invest the yield;
    3. (c) the yield is used in further qualifying cryptoasset lending or borrowing or other activities and/or what investment activities the firm uses to generate further yield; and
    4. (d) the retail client retains a claim on that yield on insolvency of the firm or otherwise.
25/10/2027R

In relation to CRYPTO 9.3.3R(7), the terms must include:

  1. (1) the market value of the initial qualifying cryptoasset borrowing collateral provided by the retail client; and
  2. (2) the maximum additional qualifying cryptoasset borrowing collateral expressed in terms of its market value, subject to CRYPTO 9.6.4R to CRYPTO 9.6.6R.
25/10/2027G

When setting out the market value of the qualifying cryptoasset borrowing collateral as required by CRYPTO 9.3.7R, a firm should take all reasonable steps to obtain the most recent valuation, presented in GBP.

Material changes

25/10/2027R

A firm must notify a retail client in good time about any material change to the key terms of agreement provided under CRYPTO 9.3.1R(1) relevant to the qualifying cryptoasset lending or borrowing service that the firm is providing to that retail client.

25/10/2027G

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. These may include, but are 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