Coinbase, Gemini plan user risk assessments in UK ahead of new rules

CEO of cryptocurrency platform Coinbase Brian Armstrong attends a reception at Buckingham Palace, in central London, on November 27, 2023 to mark the conclusion of the Global Investment Summit (GIS). (Photo by Daniel LEAL / POOL / AFP) (Photo by DANIEL LEAL/POOL/AFP via Getty Images)

Daniel Leal | Afp | Getty Images

Coinbase,, Gemini and other cryptocurrency exchanges are warning users in the U.K. that they’ll need to start filling out risk assessments and investment questionnaires aimed at testing their financial knowledge.

It comes ahead of tough new rules on the advertising of digital asset products in the country.

The firms have told users in Britain that, starting Monday, they will be required to complete a declaration about what type of investor they are, and respond to a questionnaire on a range of aspects of financial services and regulation to continue using their respective platforms.

In the customer declaration section, users are asked to select their investor profile: either a high net worth individual earning above £100,000 (roughly $126,700) annually or with a net worth of more than £250,000, or a “restricted investor” who won’t invest more than 10% of their assets. Otherwise, they cannot trade crypto.

The financial questionnaires, which vary from exchange to exchange, require users to respond to numerous queries about what range of products the firms offer, the volatile nature of crypto asset prices and the treatment of crypto as a product by financial regulators.

If a customer fails to complete the tasks successfully, they will be prevented from trading with their crypto account.

Since the passing of the Financial Services and Markets Act, a major package of financial services reforms in the U.K., firms that offer crypto and a certain type of digital currency called stablecoins are now covered by the law and must adhere to the same rules as those that govern traditional financial services.

Since Oct. 8, firms seeking to promote cryptoassets in the U.K. to retail customers must be authorized or registered with the country’s Financial Conduct Authority, or have their marketing approved by an FCA-authorized firm.

Coinbase said the changes were made “to ensure we are meeting UK investor protection standards, which require our users to have the necessary knowledge to make informed investment decisions.”

“This process is also part of Coinbase’s commitment to working collaboratively with local regulators so that we can best serve our users now and in the future,” a Coinbase spokesperson told CNBC via email.

A spokesperson gave similar reasoning for the move, saying its changes were made “primarily to ensure customers understand the risks of investing in cryptocurrency, which is a key component of the important consumer protections being put in place by the FCA.”

“We do not expect this to impact user activity in the UK and as always our customer service team is on hand to help with any queries,” George Tucker, U.K. general…

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