Regulation of cryptocurrency investments should be strengthened to enhance investor protection.
The Treasury has revealed that platforms where users buy and sell cryptocurrencies such as Bitcoin will be “supported to innovate and grow” as the government seeks to make the UK a “global destination for digital assets”.
The Financial Conduct Authority (FCA) is consulting on new rules which will be introduced from 2027. A spokesperson for the City watchdog said “our aim is to have a regime that protects consumers, supports innovation and promotes trust”.
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Millions of people across the UK now own cryptocurrency, ThisIsMoney said, and their numbers have “increased over the past year”.
How will the new rules change the way crypto is regulated?
Cryptocurrencies have become a popular alternative investment in recent years, helped by the price of bitcoin hitting record highs.
Currently, crypto platforms must register with the FCA for money laundering prevention purposes only, but the new rules will mean firms will be “regulated in the same way as other financial products”, The Guardian said.
This creates a “change from the current system”, CoinCentral said, and aligns the UK’s approach “more closely” with that of the US, while the EU has entirely separate rules specifically for crypto.
The FCA said its changes could include new rules on what firms must tell investors “so people have the facts before they invest”, as well as new standards for exchanges to “ensure trading is safe and reliable”.
Some plans from earlier this year were “diluted,” the Financial Times said. The regulator will no longer prohibit trading platforms from offering their own tokens, for example.
How will crypto regulations protect consumers?
Regulation could mean crypto companies are held accountable more effectively, “so if you lose your money to a scam you should be able to get help,” The Sun said.
The new rules should also “make it easier for the government to detect and address suspicious activity,” ThisIsMoney said.
Regulators will also be able to “impose sanctions or hold companies to account,” The Independent said.
But some areas of the new rules “remain undecided,” adds the Financial Times.
The FCA said it would consult in early 2026 on whether the market should be covered by its consumer rights rules. These rules require regulated businesses to guarantee their clients a good outcome.
Is cryptocurrency a safe investment?
More rules may be coming, but regulators continue to warn of the risks of investing in cryptocurrencies, Reuters said, particularly that investors “should be prepared to lose all their money.”
Commentators describe the regulatory change as a “watershed moment”, with David Heffron, financial services regulation expert at Pinsent Masons, explaining that it would help “build confidence and provide certainty for businesses”.
The consultation ends in February 2026 and the changes mean it will “probably only become easier” to invest in crypto, MoneyToTheMasses said. But crypto remains a “fundamentally risky investment” and will not be fully regulated in the UK until 2027.
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