Crypto Exchanges Roll Out Updates For UK Customers

Major exchanges have requested that UK customers provide information about their financial circumstances and crypto knowledge.

Will customers categorize themselves accurately or bend the truth?

Major crypto exchanges have been introducing new measures for UK customers to ensure compliance with the country's Financial Conduct Authority (FCA) Financial Promotions rules, which come into effect on January 8.

UK users are required to complete two tasks. The first is designed to categorize them as a regular or high net-worth investor. The second is a short quiz intended to assess the customer's knowledge of the digital asset space and ensure they do not have unrealistic expectations. Coinbase is the latest exchange to implement these updates before the deadline on Sunday.

From today, UK users will be requested to complete two new tasks in order to provide us with additional information that we can use to assess your level of investment knowledge, and to make sure our products and services are right for you.

Coinbase states that its "Customer Categorisation declaration" is designed to "help us make sure our products and services are tailored to you." However, the range of options limits users to investing 10% of their assets, unless they are a high net-worth client. If this is the case, they are required to provide estimates of their income and total net worth.

Screenshot of financial circumstances question

Coinbase will not allow users to trade crypto at all if they do not fit one of these categories.

"Appropriateness Assessment"

The second task is a short assessment that is designed to confirm whether customers understand the risks associated with investing in crypto assets. The UK's FCA considers these high-risk investments. As Coinbase states, "The Appropriateness Assessment is essential for helping us ensure that you're equipped to make informed investment decisions."

The brief series of questions is simple and easy to complete, and likely intended as a box-ticking exercise by exchanges, since at least one and often two of the three possible answers are clearly wrong.

Screenshot of crypto knowledge test

Similar tests have been introduced by Bitstamp and other exchanges serving the UK in recent weeks.

The UK is positioning to become a crypto hub, with regulatory updates that provide some degree of clarity for companies that have, for many years, been put off doing business in the country due to the hostile attitude of the banking sector.

The UK’s Love/Hate History With Crypto
New regulation may end UK banks’ mean streak against crypto companies.

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