While crypto trading has boomed globally, few jurisdictions have bespoke rules that regulate it like more traditional exchanges. The UK Financial Conduct Authority is now seeking to bring crypto exchanges into a better-structured regulatory remit, and it is seeking feedback from interested parties.
Earlier this week, the UK government revealed its intent to support digital asset innovation with new rules.
The FCA states that “clear crypto regulation will boost confidence in the sector” while supporting the industry’s growth. Once viewed as the wild west of investing, changes in perspective are driving an air of acceptance and legitimacy.
David Geale, Executive Director of Payments and Digital Finance at the FCA, says while the industry grows, it is largely unregulated. They want to create a regime that provides clarity while allowing for a level of consumer protection and market integrity.
“Our aim is to drive sustainable, long-term growth of crypto in the UK. We’re asking whether we have got the balance right.”
With the UK, EU, and US pursuing bespoke rules, the world will soon fall into line.
The Financial Conduct Authority (FCA) is seeking views on the future regulation of specific cryptoasset activities, ahead of legislation to bring them within regulation.
Clear crypto regulation will boost confidence in the sector, supporting growth. In this latest discussion paper (DP), the FCA is seeking views on intermediaries, staking, lending and borrowing, and decentralised finance (DeFi).
With more people using credit to purchase crypto, the DP also considers whether restrictions should be applied in that area.
The FCA has posted a Discussion Paper seeking input from:
- firms or individuals that participate in, or support the services of, the proposed regulated activities in this DP
- finance services participants
- industry groups and trade bodies
- professional advisors and experts
- consumer groups and individual consumers
- policymakers and other regulatory bodies
- academics and think-tanks
A deadline for comments has been set for June 13, 2025.
The FCA is expanding its authority on crypto beyond Money Laundering, Terrorist Financing and Transfer of Funds and financial promotions.
This broader policy of supporting digital asset innovation in the UK hopes to establish the country as a global crypto hub.