LONDON, Dec 16 (Reuters) — The UK Financial Conduct Authority (FCA) has initiated a comprehensive consultation on a suite of proposed regulations targeting the cryptocurrency industry, marking a significant step toward the formal establishment of a UK crypto regulatory regime by October 2027. This move comes just one day after the UK government confirmed that the industry will be regulated under new laws commencing in 2027, as outlined in the recent Future of Money White Paper.
The consultation document presents detailed proposals for a broad range of rules, including clear criteria for crypto asset listings, robust measures to prevent insider trading and market manipulation, and stringent standards for trading venues and brokers. It also addresses prudential requirements, seeking to ensure that firms engaging in staking, lending, and borrowing activities hold sufficient capital buffers and adequate risk-management frameworks.
In tandem with these measures, the FCA has put forward proposals to enhance transparency and consumer protection in crypto custody services, mandating segregation of client assets and regular independent audits. The consultation further includes potential financial safeguards for crypto firms to manage operational and liquidity risks, reflecting lessons learned from recent market volatility and high-profile platform failures.
According to FCA research cited in the consultation paper, UK crypto ownership among adults has declined from 12% to 8% over the past year. The regulator has emphasized its goal of balancing innovation with market integrity, stating in a release that feedback is sought to refine the proposals before a submission deadline of February 12, 2026. The FCA aims to finalize the new regime by the end of next year, coordinating closely with HM Treasury and the Bank of England to ensure a coherent supervisory framework.
"Regulation is coming – and we want to get it right. We’ve listened to feedback, and now we’re setting out our proposals for the UK’s crypto regime," 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. We welcome feedback to help us finalise these rules."
The consultation underlines Britain’s intention to align its regulatory approach more closely with that of the United States rather than adopting the European Union’s Markets in Crypto-Assets framework. Industry stakeholders, including legal firms and trade associations, have broadly welcomed the clarity but noted the importance of proportionate requirements to preserve the UK’s competitiveness in global digital finance.
Reporting by Iain Withers and Phoebe Seers; Editing by Tomasz Janowski.
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