British regulator is working on new crypto regulations

The British financial regulator Financial Conduct Authority (FCA) has launched a series of consultations on new rules for crypto and other digital assets. With this step, the United Kingdom wants to move towards a clear and coherent regulatory framework for a market that is growing rapidly, but is still difficult to understand for many consumers.

In three consultation documents, the FCA outlines proposals for crypto exchanges, intermediaries, staking, crypto lending and lending, market abuse, transparency and decentralized finance (DeFi). Companies, experts and other stakeholders can respond to the plans until February 12, 2026.

Focus on consumer protection and innovation

According to the FCA, the aim is to continue to provide scope for innovation, while better protecting consumers against risks. The regulator emphasizes that rules cannot completely eliminate risks, but must ensure fairer and more transparent practices within the crypto sector. Consumers need to better understand what they are investing in.

David Geale, executive director of payments and digital finance at the FCA, says industry input is essential to creating effective rules. According to him, the new framework should contribute to more confidence in the crypto market, without unnecessarily inhibiting innovation.

Stricter requirements for crypto exchanges

An important part of the proposals focuses on crypto exchanges. These platforms would face clearer requirements regarding admission, information provision and fair trade. Measures are also proposed to combat insider trading and market manipulation, so that the crypto market becomes more similar to traditional financial markets.

The FCA wants to prevent consumers from being disadvantaged by unfair commercial practices and unclear information. Stricter rules should make the market more transparent and reliable for a wider audience.

More clarity around staking and crypto loans

In addition, the FCA is paying attention to crypto staking services. Users lock up their crypto for a certain period in exchange for returns. The regulator wants providers to communicate more clearly about the risks of these types of products.

Crypto loans and lending are also discussed. The FCA is investigating what additional safeguards are needed to better protect both people who lend crypto and those who borrow against unexpected losses.

Rules for decentralized finance

Another important theme is decentralized finance, better known as DeFi. Financial services are offered without a central party, such as a bank. The FCA is investigating whether DeFi activities, including trading and lending without intermediaries, should be subject to the same rules as traditional financial services.

This topic is sensitive, because DeFi originated from the idea of ​​freedom and decentralization. Nevertheless, the regulator wants to prevent consumers from remaining unprotected in this fast-growing part of the crypto market.

Crypto is still largely unregulated for the time being

Although the plans are an important step towards stricter crypto regulation, the FCA warns that crypto is currently largely unregulated. Rules already apply in the areas of financial advertising and the fight against financial crime.

Consumers therefore still face significant risks. The regulator emphasizes that people should be aware of this as long as the new legislation is not yet in force.

Legislation towards 2027

The consultations follow hot on the heels of an announcement by the UK government to bring crypto assets under existing financial legislation. The British Treasury announced that crypto companies must fall under FCA supervision by October 2027.

British Chancellor of the Exchequer Rachel Reeves called integrating crypto into financial regulation a crucial step to maintain the United Kingdom’s position as an international financial center in an increasingly digital economy. With the new consultations, the country seems determined to bring clarity and confidence to the crypto market.