The United Kingdom is set to implement strict regulations on the cryptocurrency industry, with a new paper by the UK’s financial watchdog signaling a ban on public crypto offers by non-regulated entities. The Financial Conduct Authority (FCA) published a report on December 16 outlining the new directives for the crypto industry, aiming to tighten controls and prevent harm to investors.
This move builds upon existing promotional restrictions that limit unsolicited crypto communications to UK citizens, with exceptions possibly being made for authorized crypto trading platforms or under specific regulatory waivers. The FCA’s Discussion Paper DP24/4 on Admissions & disclosures and market abuse regime for cryptoassets is part of a series of publications designed to shape the UK’s crypto regime.
The proposed legislation includes plans for firms to introduce strong controls to prevent harm and for authorized crypto trading platforms to share information with each other to combat suspected market abuse. The FCA is seeking feedback from the crypto industry on critical areas such as market entry protocols, disclosure requirements, and mechanisms to combat market abuse.
The new regulatory clarity is part of a broader series of consultations as the FCA prepares for a comprehensive crypto regulatory framework expected to be fully implemented by 2026. The FCA has been monitoring compliance with anti-money laundering laws in the crypto sector since 2020 and aims to enhance consumer protection by providing investors with adequate information to make educated investment decisions and strengthening measures against fraudulent activities through a robust market abuse framework.
Public consultations on the new rules will be open until March 2025, with the FCA inviting feedback from industry stakeholders. The forthcoming regulations aim to safeguard investors and ensure the integrity of the crypto market in the UK. This regulatory climate signals a significant shift in the approach to cryptocurrency regulation in the country, with a focus on protecting investors and preventing market abuse.