UK Targets 2027 for Crypto Regulation

Overview

On 16 December 2025, the FCA published three consultation papers on proposals for UK crypto rules. In addition, on 15 December 2025, the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 were laid in parliament, to come into force on 25 October 2027.

The FCA consultation papers are:

• CP25/40: Regulating cryptoasset activities
• CP25/41: Regulating cryptoassets: admissions & disclosures and market abuse regime for cryptoassets
• CP 25/42: A prudential regime for cryptoasset firms

The FCA notes that the consultation papers are to be considered alongside previous FCA consultations, including for example on stablecoins issuance and custody of cryptoassets.

Each consultation paper is open for comments until 12 February 2026. The FCA is intending to engage with firms and stakeholders to help with understanding of the proposals. The finalised rules will be set out in policy statements, which the FCA intend to publish in 2026.

CP25/40: Regulating cryptoasset activities

Firms and individuals will typically need to apply for authorisation before carrying out any of the new regulated cryptoasset activities by way of business in the UK. The consultation paper discusses the following activity types:

• operating a cryptoasset trading platform: firms operating a cryptoasset trading platform (CATP) and deemed to be doing so in the UK by way of business will require FCA authorisation. The paper discusses:
  • location criteria: firms operating a CATP in the UK or firms operating a CATP overseas that is serving UK consumers will be required to be authorised and have a UK presence (in the form of a subsidiary or branch). Firms who only serve UK persons who are not consumers (e.g. institutional clients) can potentially do so from an overseas CATP without needing FCA authorisation
  • platform access and operation requirements
  • retail customer focused requirements
  • rules to manage specific conflicts of interest and related risks, transparency, record keeping and reporting requirements and settlement arrangements
• acting as a cryptoasset intermediary: this covers the activities of dealing in qualifying cryptoassets as principal (including lending and borrowing services), dealing in qualifying cryptoassets as agent and arranging deals in qualifying cryptoassets (including operation of a cryptoasset lending platform). For intermediaries applying to be authorised in the UK and serving retail clients directly, the FCA expects them to have a UK legal entity. For international cryptoasset firms seeking UK authorisation, the FCA intends to issue separate guidance clarifying expectations in due course. The paper discusses:
  • general execution requirements and other dealing rules and how they should be applied to cryptoasset firms. In particular, the FCA is proposing requiring any person executing, or receiving and transmitting orders for UK retail or elective professional clients to ensure these orders are ultimately executed only on UK-authorised execution venues such as UK-authorised CATPs. In addition, when a firm executes orders for UK retail or elective professional clients as a principal, it should not systematically or predominantly source liquidity from an affiliated entity operating a CATP which does not hold UK authorisation
  • proposed specific eligibility and execution requirements for retail client orders
  • proposed requirements to address specific conflicts of interest
  • requirements relating to pre- and post-trade transparency as well as record keeping and client reporting requirements for cryptoasset intermediaries and high-level expectations for settlement arrangements
• cryptoasset lending and borrowing: the paper discusses what these activities cover and considerations for firms, including:
  • proposing allowing retail access to lending and borrowing services subject to certain conditions, including in relation to disclosures, consumer understanding and obtaining express prior consent
  • use of proprietary tokens for lending and borrowing, liquidity and counterparty risk, creditworthiness and margin calls and liquidation
• staking: the paper discusses what staking involves and considerations for firms, including that regulated staking firms will be required to:
  • give retail clients information about the firm and its staking service and the key terms of agreement relating to staking services 
  • obtain retail clients’ express prior consent in relation to the key terms
  • maintain appropriate records
• decentralised finance: the FCA proposes applying the rules and guidance to firms engaging in DeFi where there is a clear controlling person(s) carrying on one or more of the new cryptoasset activities. The FCA proposes to separately consult on DeFi guidance. This would cover how the degrees of decentralisation and control will be considered in cases where the new cryptoasset activities have an identifiable controlling entity. It would also cover examples of good practice to support firms mitigating key risks and harms of financial crime and operational resilience

CP 25/41: Regulating cryptoassets: admissions & disclosures and market abuse regime for cryptoassets

The consultation paper discusses the proposed new regulatory regime for public offers of qualifying cryptoassets and their admission to trading on CATPs (the A&D regime) alongside a market abuse regime for cryptoassets (MARC).

A&D regime

The regime will apply to the following designated activities:

• offering a qualifying cryptoasset to the public in the UK
• disclosing, other than in an advertisement, information about an offer of a qualifying cryptoasset
• disclosing information relating to a qualifying stablecoin offered to the public in the UK
• requesting or obtaining the admission of a qualifying cryptoasset to trading on a CATP
• disclosing, other than in an advertisement, information about an admission, or proposed admission, of a qualifying cryptoasset to trading on a CATP
• admitting a qualifying cryptoasset to trading on a CATP

The paper discusses the A&D rules and guidance on admission to trading, liability for qualifying cryptoasset disclosure documents (QCDDs) and withdrawal rights, financial promotions (including an exemption for QCDDs and supplementary disclosure documents from the financial promotion restriction) and consumer duty considerations.

The paper also considers the position for UK-issued qualifying stablecoins. The FCA will authorise and regulate issuers of UK-issued qualifying stablecoins specifically for the activity of issuing a qualifying stablecoin. The FCA also proposes that UK-issued qualifying stablecoins will be subject to separate admission and disclosure requirements to other qualifying cryptoassets.

The FCA notes that it is considering transitional arrangements as part of the wider crypto regime and will provide clarity in a future consultation.

MARC

The paper includes discussion of proposals relating to:

• inside information disclosure responsibilities and methods of disseminating inside information
• legitimate market practices
• market abuse systems and controls for CATPs and intermediaries
• on-chain monitoring
• insider lists
• cross-platform information sharing

Certain requirements will apply to issuers, offerors and CATPs and to intermediaries.

CP 25/42: Prudential regime for cryptoasset firms

The consultation paper sets out the proposed prudential requirements for cryptoasset firms that will need to be authorised by the FCA, focused on the cryptoasset activities of operating a CATP, staking, arranging deals and dealing as agent and as principal in qualifying cryptoassets. The paper covers in particular proposals relating to own funds requirements, overall risk assessment and public disclosure of prudential information.

Third country considerations

The FCA notes that it has focused on making sure the prudential framework reflects the specific risks and regulatory standards applicable within the UK. The FCA recognises that firms may engage with cryptoassets, counterparties, or arrangements originating in third countries, including jurisdictions with differing regulatory approaches. In some cases, this may raise questions about how prudential requirements should apply.

For example, under the current proposals relating to stablecoins, certain exclusions (for example, from position risk requirements) apply only to qualifying stablecoins that comply with UK requirements. The FCA is not extending these exclusions to third country stablecoins at this stage but acknowledges that this may be an area for future consideration, particularly where regulatory outcomes are broadly aligned. The FCA states that it will also consider other third country issues in a similar manner.