FCA Opens Final Consultation on UK Cryptoasset Regulatory Framework

The UK's Financial Conduct Authority has launched a public consultation on its proposed regulatory rules for cryptoasset firms, marking the final stage of its policy development for the sector. The consultation will remain open for responses until 12 March 2026.

The move follows the FCA's recent publication of requirements for firms intending to carry out regulated cryptoasset activities. According to the regulator, applications for authorization under the Financial Services and Markets Act are expected to open in September this year, ahead of the planned launch of the new regulatory regime in October next year.

Under the proposals, cryptoasset firms would be required to meet standards on governance, operational resilience, financial crime prevention and the Consumer Duty. Firms already authorized under FSMA would need to apply to vary their existing permissions, while businesses currently registered only under anti-money laundering or payment services regimes would be required to obtain full authorization. The FCA has stated that there will be no automatic transition into the new regime.

The consultation seeks feedback on how core regulatory requirements—including the Consumer Duty, conduct rules, dispute resolution arrangements and safeguarding obligations—should be applied to cryptoasset businesses. It also addresses the treatment of retail collateral in crypto borrowing arrangements, the use of credit to purchase cryptoassets, and guidance on firms' geographic location.

The FCA said the proposed framework is intended to deliver positive outcomes for consumers while allowing innovation to continue in a market where risks are clearly understood. The regulator noted that, despite ongoing policy development following government legislation, cryptoassets remain largely unregulated outside existing rules on financial promotions and financial crime.

Specific areas covered in the consultation include complaints handling and redress mechanisms, Conduct of Business Standards for crypto activities, and the application of the Senior Managers and Certification Regime to crypto firms. Additional measures relate to staff training and competence, regulatory reporting, safeguarding requirements for custody of certain investment cryptoassets, protections for retail collateral, and location policy guidance.

The regulator said the consultation builds on proposals issued in December 2025, which aimed to align crypto regulation with principles applied in traditional finance, including clear consumer disclosures, proportionate requirements for firms and flexibility to support innovation. It also referenced earlier consultations on stablecoins, custody services, prudential standards, conduct rules and market abuse.