UK FCA Seeks Input On New “Rules of the Game” for Crypto Firms

The UK’s Financial Conduct Authority (FCA) has outlined new directives for the crypto sector, aiming to strengthen oversight and compliance.

As the country’s financial regulator, the FCA has been monitoring the industry’s adherence to anti-money laundering (AML) rules since 2020. However, it plans to implement a more comprehensive regulatory framework in 2026, following the release of draft regulations next year.

New “Rules of the Game”

In a recent publication, the FCA revealed plans to reshape the UK’s crypto landscape, including a proposal to ban public crypto offerings. The move builds on last year’s restrictions, which prohibited unregistered crypto entities from contacting UK residents. However, exceptions may be made for certain authorized platforms or specific regulatory waivers.

The proposed legislation aims to introduce stronger safeguards against potential harm in the industry, with a call for public consultation on these new rules. Among the suggestions is a requirement for authorized crypto trading platforms to share information to help identify and prevent market abuse.

The FCA’s consultation document invites feedback on important areas such as market entry procedures, disclosure requirements, and measures to combat market misconduct.

Evolving Regulatory Framework

The FCA’s new directives follow the UK government’s introduction of its first bill to recognize digital assets as personal property under law. If passed, this bill would clarify the legal status of cryptocurrencies, non-fungible tokens (NFTs), and tokenized real-world assets (RWAs), offering greater legal protection for investors.

Before the bill, digital assets were not included in property law in England and Wales, leaving owners in uncertain legal territory. The bill aims to change that, ensuring legal protection against fraud and scams. It also seeks to enable judges to make informed decisions in complex cases, such as those involving digital assets in divorce settlements.

The evolving regulatory framework has also encouraged institutional interest in cryptocurrencies. In a notable development, a UK-based pension fund managing $65 million has invested $1.95 million in Bitcoin (BTC), signaling growing confidence in the digital asset market as the legal landscape becomes clearer.

According to a CoinTab report, the investment represents 3% of the unnamed pension fund’s assets under management (AUM). This makes the unnamed pension fund the first fund in the UK to invest in digital assets.