Contract Renewal on the Horizon? What to Look For in Your Crypto Financial Approver

As the crypto industry grows and stabilises, many firms will soon be facing contract renewals with their regulatory partners. With regulators like the FCA raising the temperature, it is time to review your crypto financial approver. 

These financial approver crypto entities help companies follow rules and stay legal in the fast-changing world of crypto. They bridge the gap between crypto firms and regulators, guiding businesses through complex financial laws. After all, it is simply too much to take on in-house for some firms, particularly firms lacking experience or undergoing fast growth. 

This article looks at the considerations to make when renewing your contract or choosing a new approver. 

‍

The Role of Crypto Financial Approvers 

Crypto financial approvers play a big part in the business of digital assets. Their main job is to ensure crypto companies follow financial rules. They review and approve marketing materials, ads, and other public messages to check they meet regulatory standards.

However, it’s not just about gaining voluntary advice. If a firm is not FCA-authorised, it must have its financial promotions approved by an FCA-authorised firm before public dissemination. These are the rules laid out by the FCA to ensure compliance with regulations. 

These experts know both traditional finance rules and the unique issues of digital assets. They help crypto firms balance innovation with compliance, so companies can work well within the law.

The main things that crypto financial approvers help with are:

1. Checking marketing materials follow financial promotion rules
2. Advising on regulatory needs and best practices
3. Helping firms understand and use new rules
4. Doing risk checks
5. Talking to regulators for crypto companies

Their main goal is to help keep firms compliant, which in turn keeps the industry honest and legal. 

‍

Why Contract Renewal Matters 

Renewing your contract with a crypto financial approver is about more than just filling in some paperwork. It can greatly affect your company's compliance, and therefore its success.

Renewal lets you reassess your current deal. Circumstances change over time as your business changes, so your regulatory needs may be different this time around. For example, your marketing efforts may have significantly increased recently, and so your approver will be taking on a bigger role.

The crypto world also changes, and the rules that come with it. You may have noticed that your approver is slacking behind the times in understanding the latest rules; perhaps they cannot answer your questions about new changes. Up-to-date advice is vital, so this should be a big factor.

It's also a chance to negotiate. You might get better terms because of a change in scale or needs. Or, you may offer to pay more because of these growing needs.

‍

Key Factors to Consider in Your Crypto Financial Approver

When choosing or renewing with a crypto financial approver, consider:

Regulatory Knowledge and Compliance Record

Your approver must know the latest crypto rules inside out. Recent data shows only 14% of crypto firms succeed in FCA registration—and this figure is falling. This low rate highlights how important it is to choose a compliant approver. Look for one with a strong track record of helping firms navigate regulatory challenges.

‍

Service Level Agreements (SLAs)

Clear, achievable SLAs are vital. Good approvers offer quick turnaround times, like initial reviews within 24 hours and full approvals within four business days. But make sure they actually meet these targets consistently.

‍

Transparency and Communication

Pick an approver who values open communication. They should explain their methods and decisions clearly, without hiding behind complex language.

‍

Track Record

Consider the approver's crypto industry experience. How many firms have they helped? What's their success rate? An experienced approver can spot potential issues early and offer a tonne of insights.

‍

Culture of Building and Operating in Public

Approvers who work openly and share knowledge show they're committed to improving the industry. This can indicate a trustworthy partner. For example, being a thought leader by hosting online guides.

‍

Up-to-date Regulatory Knowledge

Since October 8, 2023, UK firms promoting crypto assets must be FCA-authorised or use an authorised firm for marketing approval. Your approver must know these new rules well and guide you through them.

‍

Four-eyes Check Policy

Ensure your approver uses a 'four-eyes' system, where at least two people check each piece of work. This greatly reduces the risk of mistakes.

‍

Crypto Specialisation

While traditional finance experience is useful, crypto-specific expertise is equally important to understand. One without the other is going to lead to serious gaps in knowledge that could be a vulnerability when checking promotions.

‍

Proactive Approach

Look for an approver who doesn't just react to your requests. They should go above and beyond to keep you informed about rule changes and how they might affect your business.

‍

Scalability

Consider if the approver can grow with your business. They should handle more work without losing quality or speed as you expand.

‍

Evaluating SLAs and Performance Metrics 

When assessing SLAs and performance metrics, look for clear, measurable targets. Good approvers typically offer

• Fast first reviews (within 24 hours)
• Quick full approvals (four business days or less)
• A system where two people check all work

These targets are crucial in the fast-moving crypto market. Recent data shows the FCA is actively enforcing new crypto marketing rules. In just two weeks after new ad rules started, they issued 221 warnings. This shows they're watching closely and acting quickly.

When evaluating performance, ask for specific data:

1. Average response times for initial reviews
2. Percentage of approvals completed within the SLA timeframe
3. Error rates and how they're addressed
4. Number of successful regulatory submissions
5. Client satisfaction scores

The FCA has even restricted one approved firm's ability to approve crypto ads. This proves not all approvers are equal. You need one that consistently meets high standards and keeps your firm safe.

When it comes to assessing your current approver, watch out for these red flags

• Slow response times
• Lack of specific crypto knowledge
• Past problems with regulators
• Unclear or inconsistent advice
• Frequent missed deadlines
• Reluctance to explain decisions
• Poor communication
• Inability to handle increased work volumes
• Lack of proactive regulatory updates

‍

Conclusion 

Choosing the right crypto financial approver is likely going to be the difference between getting into legal trouble and not—or having to take on the work yourself because of incompetence. At Englebert, we pride ourselves on successfully keeping firms compliant. 

The rules are complex and always changing, so a good approver like Englebert will keep you compliant and help your business grow safely. 

‍