UK’s Financial Conduct Authority has kicked off a consultation on proposed crypto rules that would bring the industry under formal regulatory oversight by 2027.
Summary
- The FCA has opened a public consultation on new crypto rules to bring digital assets under regulatory oversight.
- Proposed measures cover crypto asset listings, capital requirements, staking services, and restrictions to prevent insider trading and market manipulation.
According to a Financial Times report, the FCA unveiled three consultation papers on Tuesday with the goal of adapting its existing framework for traditional financial markets to accommodate cryptocurrencies and the specific risks they pose to consumers.
The proposed regulations span multiple parts of the crypto market, including rules for listing digital assets, standards for trading venues, and oversight of brokers and intermediaries.
For instance, crypto firms will be required to adhere to capital requirements already applied to Mifid investment firms, while also meeting new prudential rules tailored for the digital asset sector.
Other proposals on the table include regulations for crypto brokers and intermediaries, designed to curb potentially abusive activities such as insider trading, market manipulation, and conflicts of interest. The FCA also plans to exclude best-execution rules that apply to traditional exchanges from platforms that offer crypto trading services, while firms offering staking services will be subject to risk disclosures and additional safeguards.
One key agenda for the regulator is addressing “distributed finance” technology, where the FCA wants to apply “the same rules that apply in traditional finance” to peer-to-peer crypto transactions.
Meanwhile, decisions on some areas are being deferred until the first quarter of 2026, when the FCA will consult on whether crypto firms should be held to its consumer duty rules, which involve ensuring good customer outcomes, and whether crypto investors should be allowed to escalate complaints to the Financial Ombudsman Service.
“Our goal is to have a regime that protects consumers, supports innovation and promotes trust,” said David Geale, executive director for payments and digital finance at the FCA.
While other jurisdictions like the United States have taken a more hands-off approach led by former president Donald Trump’s deregulatory stance, the UK’s approach has been viewed by some in the industry as overly cautious and slow-moving.
However, the FCA has maintained that it wants to build a crypto market “where innovation can thrive, but where people understand the risks.”
“Regulation cannot — and should not — remove all risk. Instead, it should make sure anyone investing in crypto does so with their eyes open,” the FCA was quoted as saying.
The consultation will remain open until Feb. 12. Authorities hope to finalize the new regime by mid-2026, with full implementation scheduled for October 2027.
