The UK has taken its most decisive step yet toward comprehensive crypto regulation. In December, the Financial Conduct Authority published a trio of major consultation papers that together spell out how cryptoasset markets, firms and products would be regulated once new legislation comes into force.
The package, CP25/40, CP25/41 and CP25/42, sits beneath the draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, laid by the government earlier this month. Taken together, they amount to a full regulatory framework covering conduct, market integrity and financial resilience for cryptoasset activity in the UK.
From AML to full market regulation
Until now, the FCA’s role in crypto has been narrow, focused mainly on anti-money laundering registration and financial promotions. The new proposals mark a shift to end-to-end supervision, closer to the standards applied in traditional financial markets.
CP25/40, titled Regulating Cryptoasset Activities, sets out which activities will require authorisation and how they must be run. This includes cryptoasset trading platforms, intermediaries, lending and borrowing, staking, and decentralised finance arrangements where a controlling entity can be identified. Firms carrying out these activities “by way of business in the UK” would need FCA authorisation and would be subject to detailed conduct, governance and conflict-of-interest rules.
A key feature is the central role given to cryptoasset trading platforms. UK-authorised platforms would act as gatekeepers, responsible not only for orderly trading but also for enforcing admission, disclosure and market abuse requirements across their markets.
A UK market abuse regime for crypto
Those obligations are fleshed out in CP25/41, which introduces a bespoke Admissions and Disclosures regime and a Market Abuse Regime for Cryptoassets. The FCA is explicit that it is not simply copying the UK Market Abuse Regulation. Instead, it proposes a crypto-specific approach that reflects the sector’s continuous trading, on-chain transparency and fragmented global structure.
Under the proposals, most cryptoassets would need a qualifying cryptoasset disclosure document before being admitted to trading for retail investors. Trading platforms would be expected to carry out due diligence and reject tokens likely to harm consumers, while issuers and offerors would face statutory liability for misleading or incomplete disclosures.
The market abuse regime would prohibit insider dealing, unlawful disclosure of inside information and market manipulation, supported by tailored guidance on what those concepts mean in crypto markets and proportionate surveillance obligations for platforms.
Prudential rules to limit disorderly failure
The third pillar, CP25/42, tackles financial resilience. It introduces a prudential framework for authorised crypto firms, covering minimum capital, liquidity, risk assessment and wind-down planning. The FCA’s emphasis is not on crypto price volatility, but on operational failure and the ability of firms to exit the market without harming consumers.
Minimum capital thresholds vary by activity, with higher requirements for trading platforms and firms dealing as principal. All firms would need to assess their risks holistically and hold sufficient resources to wind down in an orderly way.
Why it matters
For the FCA, the package is about closing long-recognised gaps. For firms, it is a signal that operating in the UK will require higher standards but also offers regulatory clarity. The regulator repeatedly stresses proportionality and competitiveness, arguing that clear rules can support innovation while improving trust.
The consultation period runs until 12 February 2026. Final rules are expected next year, with the new regime taking effect from 2027. If implemented as proposed, the UK would move from piecemeal crypto oversight to one of the most comprehensive national crypto regulatory frameworks globally.