UK financial regulator The FCA has taken the next steps to set out regulation of the UK’s crypto market and trading, announcing it is seeking feedback on plans to improve transparency in the UK’s crypto markets .
We recently reported that an FCA study shows that around 12% of UK adults now own crypto.
The regulator said clear crypto regulation would improve the integrity of the UK’s crypto markets, help protect people and support the UK’s growth and competitiveness. Admission, disclosure and market abuse regimes are essential to improving the integrity and cleanliness of our crypto markets, as well as helping people make informed financial decisions.
FCA Discussion Paper DP24/4 (Admission, Disclosure and Market Abuse Regime for Crypto-Assets) is part of a series of publications designed to help us shape the Kingdom’s crypto regime -United. It sets out proposals for companies to introduce strict controls to prevent harm. The regulator also suggests certain companies, like licensed crypto trading platforms, share information with each other to help stop suspected market abuse. This will reduce fraud and help promote good practice in the sector.
The new proposals aim to reduce risks without stifling growth and innovation. The FCA aims to reduce consumer harm and promote confidence in the UK crypto-asset market by:
- improve regulatory clarity so that there are clear and consistent “rules of the game” for businesses and consumers,
- ensure that consumers have the information they need before buying or selling cryptoassets,
- require controls and processes to create fair and orderly trading conditions, and
- further reduce the risks of money laundering and losses due to fraud.
The FCA encourages the crypto industry to share its expertise and help shape the rules. The regulator wants the industry to take the lead in developing new ways of disclosing important information, to ensure people understand the risks before purchasing cryptocurrencies.
The discussion paper reflects learnings from a series of FCA-led crypto roundtables held with the industry earlier in the year. It also builds on previous government consultations.
The FCA added that it wanted to develop a fair, balanced and proportionate crypto regime for everyone. It needs input from government, international partners, industry and consumers to help develop good rules. Contributors have until March 14, 2025 to give their opinion to the FCA.
The regulator continues to reiterate that while it continues to develop UK crypto regulation, crypto remains largely unregulated in the UK and presents high risk. If something goes wrong, you are unlikely to be protected and you should be prepared to lose all your money.
FCA Discussion Paper DP24/4 – Admissions, disclosures and market abuse regime for crypto-assets – can be seen in full here.
