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The UK financial regulator has published proposals to regulate for the first time many areas of the crypto market, including rules for listing digital assets, restrictions on insider trading and capital requirements for the fast-growing sector.
The Financial Conduct Authority’s plans were released a day after the government presented draft legislation for cryptoasset companies. They are designed to balance the UK’s desire to be a global digital asset hub with the aim of protecting consumers in the high-risk market.
In some areas, the FCA said it had diluted its plans from initial proposals published earlier this year. It will, for instance, no longer ban cryptoasset trading platforms from offering their own tokens on the markets they operate or from acting as principal dealers.
The regulator’s plans, detailed in three consultation papers published on Tuesday, aim to adapt its existing rules for traditional financial markets to the unique nature and specific risks of cryptoassets, such as Bitcoin.
The consultation is open until February 12, with the UK’s cryptoasset regulations expected to be finalised later next year before going live in 2027.
“Regulation is coming — and we want to get it right,” said David Geale, executive director for payments and digital finance at the FCA. “Our goal is to have a regime that protects consumers, supports innovation and promotes trust.”
Britain has been criticised for what some in the industry claim is an overly cautious approach to embracing cryptoassets, with Donald Trump’s US administration taking a much lighter-touch approach.
But the FCA said it wanted a cryptoasset market “where innovation can thrive, but where people understand the risks”. It added: “Regulation cannot — and should not — remove all risk. Instead, it should make sure anyone investing in crypto does so with their eyes open.”
Cryptoasset companies will need to comply with the existing capital requirements for Mifid investment firms as well as a new set of rules specific to the digital asset sector. They will also require a minimum amount of liquid assets to allow them to “begin wind-down without causing material harm”.
“Regulation will not be able to limit all the risks in the cryptoasset sector,” the FCA said. “Anyone who buys cryptoassets should be aware of the risks involved — including that they might lose all the money they invest and the significant volatility of the cryptoassets’ value.”
The regulator is presenting rules for crypto brokers and intermediaries, measures to stop insider trading and market manipulation and regulations for companies offering so-called staking services, in which a crypto asset is pledged in return for a reward. It said best-execution rules that apply to traditional exchanges would not do so for crypto trading venues.
The FCA also sought to address the challenge of regulating “distributed finance” technology used by many cryptoassets, in which transactions are agreed directly between parties without any intermediary. It is proposing that “the same rules that apply in traditional finance should also apply” to distributed finance.
Some areas of crypto regulation remain undecided. The FCA said it would consult in the first quarter of 2026 on whether the market should be covered by its consumer duty rules, which require companies to ensure clients get a good outcome, and if its customers should be able to complain to the Financial Ombudsman Service.
