Most failures in crypto firms are conduct failures: the words on your website, the way you route orders, who trades when, and how you handle complaints. This piece turns “fair, clear, and not misleading” into daily practice you can evidence.
Treat your Client Agreement as the single source of contractual truth and mirror the key terms in-product.
Operate a visible conflicts-of-interest framework (affiliate routing, inventory/principal dealing, research vs. distribution).
Maintain insider lists and a staff-dealing regime with pre-clearance and blackout windows.
Keep all communications—marketing, research, executive statements, KOL posts—balanced, targeted by investor class, and archived.
Run proportionate surveillance for market abuse and publish a complaints policy with real SLAs and root-cause remediation.
1) Client Agreements: state the deal in plain language
Your Agreement must say who you are (licence, authorised activities), who owns Client VAs, how withdrawals work (SLA, queues under stress), when assets may leave your control (custodian, validator, or venue), fees, dispute resolution, and wind-down priorities. If you may use client assets (collateral, staking, rehypothecation), obtain explicit, granular, prior consent—separate from standard terms and easily revoked.
Mirror the Agreement in your UI: put withdrawal timeframes on the withdrawal screen; link to fee tables where fees apply; use tooltips to summarise risks (e.g., staking lock-ups, de-peg risk). Keep a version history and give clients 30 days’ notice for material changes, with a side-by-side diff in simple English.
2) Public disclosures clients actually read
Build a public disclosure hub: licence number and activities, Responsible Individuals, complaints route and timelines, and third parties (banks, custodians, validators). For each listed VA, maintain an asset page with short, mobile-first risk bullets (volatility, liquidity, governance/upgrade risk, bridge/oracle reliance), links to the issuer’s disclosures, and a date/time stamp. Add delisting criteria (liquidity collapse, security incident, sanctions exposure), and show decisions with a short rationale.
3) Conflicts of interest—publish the map, then monitor it
Common conflicts include routing flow to an affiliated venue/broker, holding proprietary inventory to fill client orders (principal dealing), publishing research while also distributing instruments, and executives’ personal token holdings.
Operate three layers:
Register: log conflicts, mitigants, and evidence.
Controls: best-execution policy with TCA, segregation of treasury from client execution, position limits on inventory, and independent review of research.
Disclosure: put routing/affiliation statements and inventory policy on your website and in the Agreement. If you earn rebates or other inducements, explain how you avoid outcome bias.
4) Best execution and order handling
Define factors (price, costs/fees, speed, likelihood of execution/settlement, size, market impact) and their weights. List eligible venues/brokers and outage procedures. Run TCA monthly to prove that your routing achieves the “best possible result” overall. Keep exceptions logs where you deviate from policy and record the reason (e.g., venue freeze, fragmentation). For Retail, be conservative about complex order types; explain clearly when partial fills or slippage may occur.
5) Insider lists and staff dealing
Whenever a team accesses material non-public information—listing or delisting decisions, treasury operations, a security incident, or negotiations with a major issuer—add names to an insider list with timestamps, reason for inclusion, and expiry. Staff-dealing policy should mandate pre-clearance, position limits, and blackout windows around market-sensitive events. Record approvals and denials; retain lists for eight years.
6) Market abuse: prevent, detect, act
Your rules must prohibit insider dealing, unlawful disclosure, and manipulation (spoofing, layering, wash trades, pump-and-dump). “Proportionate surveillance” means:
For an exchange/venue: order-book analytics with alerts for layering/wash patterns; cross-venue checks; referral workflows to compliance and, where necessary, authorities.
For brokers/portfolio managers: execution analytics, unusual fill paths, and wallet-linkage flags on counterparties.
Investigations should produce a single case file with data, narrative, and decision. Maintain a referral log for matters reported to regulators or law enforcement.
7) Research, commentary, and executive speech
If you publish research, label sponsored content, declare methodology (sources, index rules, look-backs), and balance upside with risk. Keep a fact-check log. Executives must avoid “talking the book”: when their statements might move prices (new listings, delistings, treasury actions), insist on pre-clearance and blackout windows for personal trading. Where executives hold relevant tokens, disclose holdings if commentary could be perceived as promotional.
8) Investor classification and communications
Gate content and product features by investor class: Retail receives plain-language materials and product restrictions (e.g., no leverage without additional permissions; long-tail caps); Qualified/Institutional can receive deeper analysis and more complex product sets. Run appropriateness checks for Retail on complex features, and store evidence. Publish a target-market statement for each product line; if a product has no Retail target market, do not market it to Retail at all.
9) Marketing controls and KOL discipline
Pre-approve all UAE-targeted materials: banners, social posts, landing pages, webinars, airdrop campaigns, and influencer scripts. Ban guarantees, “risk-free/safe,” or urgency tactics. Maintain a marketing repository with final creatives, audience settings, approvals, and takedown evidence, and keep it for eight years. When working with KOLs, give written scripts with risk language, track posts, and monitor comments for unsupported claims; a KOL’s reply can still be your marketing.
10) Complaints handling—your conduct barometer
Publish a plain-language policy with timelines: acknowledge within one week, aim to resolve within four weeks (complex cases up to eight). Log each complaint with a unique ID, time stamps, category (withdrawal delay, valuation, fees, marketing/mis-sale), severity, investor class, and jurisdiction. Investigate independently; attach artefacts (agreements, screenshots, chain data). Provide a reasoned decision and a fair remedy where you’re wrong. Aggregate themes into root-cause actions (UI edits to show fees earlier, new warnings on staking lock-ups, changes to routing) and report progress to the Board.
11) Evidence and record-keeping
Keep everything for eight years: Agreements, disclosure versions, insider lists, staff-dealing pre-clearances, surveillance cases, complaints, research approvals, marketing repositories, and TCA outputs. Your DMS should retrieve any artefact in minutes. Hash/checksum important documents and maintain immutable version histories.
12) 30–45 day implementation sprint
Weeks 1–2: Redraft Client Agreements and disclosures; publish routing/conflicts statements; tighten staff-dealing policy and insider-list procedures.
Weeks 3–4: Stand up surveillance (or tune thresholds); create research sign-off and fact-check logs; implement KOL scripts and monitoring; run an executive-comms workshop.
Weeks 5–6: Sample cases for internal audit; publish the enhanced disclosures and asset pages; start a conduct dashboard to the Board (complaints themes, staff-dealing stats, surveillance alerts, marketing takedowns).
13) Pitfalls (and fast fixes)
Agreements that bury risk → Move permissioning and key risks to the front, in plain language, and mirror them in product flows.
Disclosures no one reads → Use short bullets, bold warnings, and a FAQ; test with non-lawyers.
Staff trading chaos → Automate pre-clearance and blackout alerts; tie to HR.
Research as marketing → Label sponsored pieces; separate research from sales; keep a fact-check log.
KOL drift → Scripts, monitoring, and takedown SLAs; archive every version.
Copy-paste checklist:
Client Agreement (ownership, withdrawals, fees, permissions) • Public disclosures hub with licence/activities/RIs and third-party list • Conflicts register + best-execution/TCA • Insider lists + staff-dealing pre-clearance/blackouts • Surveillance with case files and referral log • Investor-class gating and appropriateness checks • Marketing repository + KOL scripts and takedowns • Complaints policy/MI • Eight-year searchable records.
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Disclaimer: This article is provided for information only and does not constitute legal advice. Engage counsel for advice tailored to your facts and permissions.