UK financial regulator shares proposals for new crypto assets market framework

The Financial Conduct Authority has launched two further consultations on the latest stage of its proposals for regulating the crypto asset market, including how its consumer duty would apply to firms trading and distributing crypto assets.

The consultations are the latest in a series of engagement exercises by the FCA with the crypto asset sector on how best to approach future regulation, following on from consultations in 2025.

The first of the new consultations (pdf/264 pages, 2.6MB) covers how redress and dispute resolution for complaints against crypto asset firms would be handled, along with exploring safeguarding, conduct of business standards and what regulatory reporting would look like under the new regime.

It also covers issues including the implementation of training and categorising crypto asset firms under the senior managers and certification regime, while the second consultation (pdf/21pages, 233kb) focuses on how the requirements of the consumer duty and the need for good outcomes for retail customers would map onto crypto assets.

This comes in the wake of feedback from previous engagement with the industry on consumer duty, and the need for sector-specific rules for when crypto activities fall under the regulator’s authority.

David Heffron, a financial services regulation expert with Pinsent Masons, said the consultations would give the market an opportunity to see more of how the FCA proposes to regulate the sector.

“The FCA is seeking a 'same risk same regulatory outcomes' approach by applying existing rules to crypto asset activities where appropriate, but with the necessary additions or modifications,” he said.

“Consumer duty considerations will be relevant as well with the FCA proposing guidance on crypto-specific applications, and highlighting where it’s not drafting specific rules but instead proposing to rely on consumer duty outcomes.”

Among the proposals are allowing complaints to the Financial Ombudsman for consumers of regulated crypto asset firms, although they would not be eligible for the Financial Services Compensation Scheme.

“For firms already engaging in crypto asset business activities or proposing to do so, this is a further tranche of new material from the FCA to consider, in addition to the previously published ones,” said Heffron.

“While an iterative approach is proposed by the regulator, in respect of reporting for instance, with baseline requirements set initially and the likelihood of more reporting further down the line, for firms that have not previously been regulated authorisation will herald a very different approach for their business to factor into day to day operations, systems and staff responsibilities.”

The FCA describes the two new consultations as the last step in its consulting on crypto rules, before publishing final rules in policy statements with the new regime expected to come into force late next year. The consultations will run until 12 March 2026.