The Financial Conduct Authority (FCA) in the United Kingdom has initiated a series of consultations regarding proposed rules for digital asset markets, signifying the next step in the government’s initiative to create a robust regulatory framework for crypto assets.
The proposals, published in three consultation papers, address crypto trading platforms, intermediaries, staking, lending and borrowing, market abuse, disclosures, and decentralized finance (DeFi). The FCA indicated that responses to the consultation will be accepted until February 12, 2026.
The regulator emphasized that these proposals are designed to foster innovation while ensuring that consumers are aware of the risks related to crypto investments. It acknowledged that regulation should not completely eliminate risks but promote responsible and transparent operations among participants.
“Our aim is to establish a regime that safeguards consumers, supports innovation, and enhances trust,” stated David Geale, the FCA’s executive director for payments and digital finance, noting that feedback from the industry will be instrumental in shaping the final regulations.
Transitioning from advertisements to market structure
The consultations represent a significant move in the U.K.’s journey towards comprehensive “market structure” rules for crypto, transitioning from previous focuses on financial promotions and Anti-Money Laundering compliance.
According to the proposals, exchanges will be subject to more explicit standards regarding admissions, disclosures, and trading integrity. Additionally, protective measures against insider trading and market manipulation will align crypto markets more closely with traditional financial markets.
The consultation also addresses crypto staking services, seeking opinions on how companies should disclose risks associated with yield-bearing products that lock customer assets. Crypto lending and borrowing are also part of the discussion, with proposed safeguards designed to protect both borrowers and lenders.
Another aspect of the consultation concerns decentralized finance (DeFi). The FCA is seeking input on whether DeFi activities, including trading, lending, and borrowing without intermediaries, should adhere to the same regulatory expectations as traditional financial services.
While consultations are active, Geale reminded the public that these assets remain largely unregulated.
“As we collaborate with partners to establish the UK’s crypto regulations, it’s important to note that crypto is primarily unregulated – aside from financial promotions and financial crime,” Geale cautioned.
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UK aims to extend financial regulations to crypto
The consultation was launched the day after the UK government revealed plans to introduce a bill to extend existing financial sector legislation to crypto assets by 2027.
On Monday, the UK finance ministry reportedly announced intentions to implement legislation that would bring crypto companies under the regulation of existing financial laws by October 2027, subjecting them to FCA oversight.
UK Chancellor Rachel Reeves asserted that integrating crypto into the regulatory framework is a “crucial step” in solidifying the UK’s position as a premier financial center in the digital era.
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