CryptoUK, the trade association for cryptocurrency and blockchain enterprises, has issued its formal reply to the Financial Conduct Authority’s (FCA) Consultation Paper CP25/40. Released on December 16, 2025, this document outlines proposals to integrate essential crypto operations into the nation’s financial oversight system.
The initiative aims to align digital currencies with established financial norms, covering areas like exchange platforms, brokerage services, credit facilities, safekeeping, and behavioral guidelines.
CryptoUK’s input, dated February 11, 2026, underscores the industry’s push for balanced rules that foster growth while ensuring stability.
On 16 December 2025, the Financial Conduct Authority (FCA) published a coordinated package of three crypto consultation papers, setting out the next phase of the UK’s digital asset regulatory framework. Today, we are pleased to share the first of our three responses.
CP25/40… pic.twitter.com/k16K4psCnB
— CryptoUK 🇬🇧 (@CryptoUKAssoc) February 11, 2026
The FCA’s paper represents a pivotal step in Phase 2 of the UK’s crypto regulatory rollout, building on earlier discussions and aiming to authorize and monitor firms involved in crypto dealings similarly to conventional finance entities.
It proposes bringing activities such as operating trading venues, facilitating deals, and managing lending or staking under regulatory scrutiny.
This move is part of a broader package, including companion papers on admissions, disclosures, market abuse prevention, and capital requirements for crypto businesses.
The goal is to promote fair markets, shield users, and encourage innovation, positioning the UK as a competitive hub in the global digital economy.
CryptoUK welcomes the FCA’s emphasis on syncing with worldwide benchmarks, viewing it as crucial for international operations.
The association advocates for an “equivalence” mechanism, where the UK recognizes comparable foreign regulations, to ease border-crossing activities and bolster the country’s appeal to investors and firms.
They stress the urgency of kickstarting this alignment to avoid delays that could hinder progress.
A major concern highlighted is the lack of precision in key terms.
The paper interchangeably uses “consumer” and “retail client,” which CryptoUK argues creates confusion.
They recommend clearly defining boundaries between consumers, retail investors, and professionals to streamline compliance on issues like information sharing, appropriateness checks, and ethical standards—especially for companies active in multiple countries.
Further, they suggest issuing revised directives to clarify if expert investors might be classified as consumers in certain scenarios.
CryptoUK also points out gaps needing attention.
For instance, it’s unclear if providing credit to everyday users via digital assets falls under consumer lending laws.
While the paper touches on borrowing and lending, this overlap with existing credit rules remains ambiguous, and explicit advice is requested to resolve it.
Additionally, the status of tokenized direct loans between peers is questioned, as they don’t fit neatly into categories like investment-grade crypto or transferable assets.
Better definitions here would sharpen the regulatory boundaries, helping firms navigate compliance more effectively.
This response is the first in a trio from CryptoUK, addressing the FCA’s coordinated consultations.
It reflects collaborative efforts, with acknowledgments to legal experts for their input.
As deadlines for feedback close on February 12, 2026, the FCA plans to finalize rules later in the year, potentially reshaping how crypto entities operate in the UK.
Industry observers see this as a constructive dialogue, balancing protection with flexibility.
By addressing these points, the UK could lead in creating a robust yet adaptive framework, attracting talent and capital.
However, unresolved ambiguities might slow adoption or push businesses overseas.
CryptoUK’s proactive stance signals the sector’s commitment to working with regulators for sustainable development.
Overall, this exchange highlights the evolving nature of crypto governance.
As digital assets gain mainstream traction, such consultations are vital to mitigate risks like volatility and fraud while unlocking economic potential. Stakeholders await the FCA‘s synthesis of inputs, which could set precedents for other jurisdictions eyeing similar reforms.