UK's Big Move: Crypto Rules Are Coming!
The UK is making significant strides in the crypto world. The Financial Conduct Authority (FCA) has initiated discussions on new rules for digital assets, part of the government's plan to establish a robust regulatory framework for crypto.
Key Proposals
The FCA has released three sets of proposals covering:
- Crypto trading platforms
- Staking, lending, and borrowing
- Market abuse, disclosures
- Decentralized finance (DeFi)
Feedback is welcome until February 12, 2026.
Objectives
The FCA aims to:
- Protect consumers by ensuring they understand the risks of crypto investments.
- Support innovation while maintaining fairness and transparency.
"Our aim is to have a system that protects consumers, supports new ideas, and builds trust."
- David Geale, FCA’s executive director for payments and digital finance
Regulatory Enhancements
The new proposals would:
- Set clearer standards for exchanges, including admissions, disclosures, and trading integrity.
- Tackle insider trading and market manipulation, aligning crypto markets with traditional finance.
Staking and Lending
- Staking services: The FCA seeks input on how firms should disclose risks when offering products that lock up customer assets.
- Lending and borrowing: Safeguards are proposed to protect both borrowers and lenders.
Decentralized Finance (DeFi)
The FCA is considering whether DeFi activities, such as trading and lending without intermediaries, should be regulated like traditional financial services.
Current Status
David Geale reminded that crypto is still largely unregulated:
"While we work on the UK’s crypto rules, remember that crypto is mostly unregulated – except for ads and financial crime."
Legislative Timeline
The consultation follows the UK government's announcement to extend finance laws to crypto assets by 2027. The UK Finance Ministry plans to introduce legislation to bring crypto companies under existing financial laws by October 2027, placing them under the FCA’s oversight.
"Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a financial center in the digital age."
- UK Chancellor Rachel Reeves
