FCA Issues Warning on Trading Apps Pushing CFDs and Crypto to Retail Investors

The UK Financial Conduct Authority (FCA) has warned that trading applications which encourage users to invest in high-risk products such as CFDs and cryptocurrencies could breach its Consumer Duty rules.

In a discussion paper released in December (DP25/3), the regulator highlighted that the distinction between long-term investing and speculative trading has increasingly blurred. The FCA focused on non-advised platforms, particularly apps that promote riskier products through gamification, push notifications, and preset investment or leverage levels.

These features, referred to as digital engagement practices (DEPs), may influence consumer behavior. The FCA noted that where such features exploit behavioral biases without supporting positive outcomes, they could conflict with the Consumer Duty, which requires firms to act in good faith, avoid foreseeable harm, and support retail customers in achieving their financial goals.

Research cited in the paper indicated that app users exposed to high levels of digital engagement features generally experienced worse investment returns. Underperformance was primarily linked to trading in cryptocurrencies and CFDs, which were only available on high-engagement apps in the sample.

The regulator emphasized that DEPs are not inherently harmful and can be used constructively—for instance, to provide in-app education, guidance tools, or clearer cost and long-term return information. However, apps directing financially vulnerable consumers or those with low risk tolerance towards high-risk products may face challenges demonstrating compliance with Consumer Duty requirements.