Did you receive a message in the last few days from Coinbase? It would be about how the latest FCA Financial Promotions rules mean that UK users must complete two new tasks to provide Coinbase with additional information.
If you haven’t, then you probably will. And many of you will find that you cannot trade once you try to complete the new tasks.
In August 2022, the UK’s Financial Conduct Authority set out its final policy and handbook rules for high-risk investments. This affects:
- consumers investing, or who are considering investing in high-risk investments.
- authorised firms which approve financial promotions for unauthorised persons, whether high-risk investments or otherwise
High-risk investments include digital assets. But importantly, these changes were in effect from December 1, 2022. Now, they have been updated. And the FCA has added more guidance. Namely:
“The FCA has offered cryptoasset firms registered or authorised by the FCA flexibility under a modification by consent to implement parts of the rules that require greater technical development. If their application is successful, they will have until 8 January 2024 to implement the 24-hour cooling period, client appropriateness testing and client categorisation features. All other measures of the financial promotions regime came into effect from 8 October 2023.”
What is the new Coinbase appropriateness test?
It didn’t take long for one of our editorial team to get the email from Coinbase. As digital assets and DeFi journalists, we need to use exchanges like Coinbase. But, even with our 5.5-year track record of covering in-depth stories about Binance, Chainlink, FTX, Coinbase and multiple digital assets like Hedera or Uniswap, we found the new tasks bewildering.
A quick glance on Reddit showed that we were not the only ones.
“I did the trading questionnaire, and it says I can’t do any trading?” read one post. “I’ve just failed the quiz twice. Does anyone know how many days we have to pass it? Low-key getting worried,”
We thought we would log in to check out what all the fuss was about. And maybe try to pass the test ourselves. Alas, what appeared to at first be a simple set of questions didn’t seem to be that simple at all:
The problem is that if you fail the test twice, you need to wait 24 hours to try again. And if you fail, then, it’s another 24 hours.
What questions does Coinbase ask?
Most of them appear to be standard. We took a screen shot of one of the questions to help our readers:
But as the system has now blocked our team for 24 hours, we can’t tell you much more. Except one very interesting thing. The Coinbase assessment suggests that users who fail read more on the topic of digital assets prior to starting again. What about if you are writing the topics and you still fail?
We approached Coinbase on X, formerly known as Twitter, but there was no response. We also tried to contact their customer services team, but a 38-minute wait was the minimum to speak to someone who would probably not be able to help anyway.
So what can a user do? Go to the FCA? Change exchange? Stop buying digital assets? Or is it actually because the Bitcoin ETF is about to be rolled out, and Coinbase is not keen on sharing the spoils? Your guess is as good as ours. Since the email came in, though, Bitcoin has gone up. And not just a tiny bit.
If any of our readers can suggest how to speak to Coinbase about this problem, we would be delighted to update this story in order to help other unfortunate Coinbase users.