The Financial Conduct Authority (FCA) has proposed new rules for cryptoasset activities to propel the UK as a leader in “innovation‑friendly crypto regulation”, an expert has said.
The UK financial regulator has published three consultations on its proposed rules for the new conduct and prudential regimes to regulate cryptoasset activities, and cryptoasset markets, in the UK for the first time.
The proposals come a day after HM Treasury announced plans to introduce new rules that will bring cryotoassets into the FSMA regulatory perimeter from 2027. These proposals aim to move the UK another step closer to a fully-fledged regulatory regime for cryptoassets in line with countries like the US, which has already extended certain financial regulations to firms and products in the cryptoasset sector.
This development follows draft rules published earlier this year by the UK government, which proposed bringing all UK crypto exchanges, dealers and agents under the Financial Services and Markets Act 2000 (FSMA) and extending the financial services regulatory perimeter to cover “qualifying cryptoassets” and “qualifying stablecoins” .
These types of assets were previously unregulated, but the government says from 2027 firms issuing them, or otherwise providing relevant services relating to them, will fall under the FCA’s supervisory authority and will be subject to the same regulatory and transparency standards as “traditional” financial services providers.
The FCA has set out a raft of consultations in response to the government’s planned legislation, which it says are designed to create “proportionate requirements” for firms by balancing the needs to protect consumers, support innovation and promote trust more widely across the sector.
In one consultation (226 pages / 2MB), the FCA said it was seeking industry feedback on proposed rules for cryptoasset trading platforms; intermediaries, including those arranging, dealing, lending or borrowing cryptoassets on behalf of customers; and wider firms involved in staking and decentralised finance..
The regulator confirmed that it was progressing with a number of its initial proposals from earlier in the year, but had decided not to go ahead with plans to prohibit UK cryptoasset trading platforms from “admitting tokens to trading in which they have an interest”. Instead, platforms will be permitted to admit their own tokens provided they follow all relevant compliance standards and have mechanisms and policies in place to halt trading “if platform rules are broken”.
In a second consultation paper (252 pages / 2.6MB), the regulator also proposed rules aimed at regulating cryptoasset markets, including a new dedicated admissions and disclosures regime, and a standalone market abuse regime for cryptoassets. These include rules requiring issuers, offerors and trading platforms to maintain insider lists and proposals for cross-platform information sharing to help prevent, detect and disrupt market abuse. They also include rules for listing cryptoassets on trading platforms, and in respect of what firms must tell investors so that people are adequately informed on the nature and risks associated with cryptoassets before they invest.
The regulator also outlined plans for a new prudential regime for cryptoasset firms in a third consultation paper (PDF 170 pages / 1,473 KB), including proposals to help support the development of cryptoasset markets in the UK while reducing “potential harms that firms in these markets can cause” to market confidence, for instance due to a lack of adequate financial reserves and the risks of potentially disorderly firm failures.
The FCA is seeking feedback on all three consultations by12 February 2026, which would introduce a number of chapters to the proposed CRYPTO and CRYPTOPRU sourcebooks within the FCA Handbook.
David Heffron, a expert in financial services regulation at Pinsent Masons, said these developments marked a “watershed moment”, both for the UK’s role as a global leader for institutional crypto trading and, more widely, the regulator’s mandate across the financial services sector. “The FCA’s new consultations are a game-changer for the UK crypto market,” he said. “By applying the same standards as traditional finance, covering governance, conduct, prudential standards and the consumer duty, the regulator is moving from anti-money-laundering-only oversight to a full FSMA-style regime. This is about building trust and giving firms certainty, while positioning the UK as a global leader in responsible innovation.”
Sébastien Ferrière, an expert in financial services regulation at Pinsent Masons, said the consultations provided an important opportunity for industry to engage with the FCA’s proposals and provide feedback ahead of the new regime coming into force as planned in 2027. “These moves aim not only to shore up market integrity domestically but also to enhance global access – fostering confidence among overseas investors and potentially attracting international liquidity into the UK’s regulated crypto ecosystem,” he said. “That being said, the compliance uplift will be significant, so firms should engage now ahead of the 12 February 2026 deadline.”
Contact an adviser
