Crypto Regulation in the UK

Market abuse regime (“MAR”) and admissions & disclosures (“A&D”) rules  

Document: DP 24/4

 MAR

The MAR regime includes proposed amendments for disclosures by issuers or offerors at the point of admission to trading on a cryptoasset trading platform (“CATP”), which leans on the existing Market Abuse Regulation framework for financial instruments. The regime will cover:

1. Prohibiting insider dealing relating to cryptoassets traded on a regulated CATP;
2. Requiring the disclosure of inside information relating to cryptoassets traded on a regulated CATP; and
3. Prohibiting market manipulation relating to cryptoassets traded on a regulated CATP.

Key highlights include:

• Issuers who request admission to a CATP for their cryptoassets will be responsible for publicly disclosing relevant inside information.
• The CATP would undertake the appropriate due diligence and make its summary available to the public.
• The CATP may decide whether to approve or reject the application for admission to trading based on its assessment of likelihood of consumer detriment and level of comfort from its due diligence.
• If the application is accepted, the admission documents will be filed on the National Storage Mechanism.

The proposed requirement under the MAR regime to disclose inside information will work in conjunction with the A&D rules’ admission document requirements to give investors sufficient information regarding a cryptoasset at the point of admission. 

A&D

The FCA has stated that the proposed cryptoasset A&D rules will largely align with proposed reforms to the UK’s existing prospectus regime for traditional transferable securities (set out in the draft Public Offers and Admission to Trading Regulations 2024).

The A&D regime will be triggered by two key activities, namely:

1. admitting (or requesting admission) of cryptoassets to trading on a regulated CATP; and
2. making a public offer of cryptoassets in the UK.

Once the A&D regime is triggered, the person applying to a CATP for admission to trading (which may be the CATP itself) will be responsible for the production and publication of:

• an admission document containing the core information which consumers need to make an informed decision; and
• a summary of the due diligence performed by the CATP, in relation to both the offeror and the admission document.

These documents will then need to be filed so that they are publicly available on the FCA’s National Storage Mechanism, which will likely be adapted for this purpose. The regime also sets out the proposed content and format requirements for these documents.

Trading platforms, intermediation, lending, and staking

Document: DP25/1

The proposal seeks to provide more granularity on some of the activities proposed to be brought within FCA’s regulatory remit.

In contrast with MiCA (which does not differentiate between retail and institutional investors), the FCA has identified several areas where retail investors might require greater protection compared to institutional ones.

 Key highlights include:

1. Cryptoasset trading platforms – In general, an entity operating a trading platform for cryptoassets in the UK, or providing services to UK retail clients, will need to be authorised in the UK. The FCA proposes potentially allowing overseas trading platforms to operate in the UK via a branch, provided there is also a UK subsidiary in the group handling other related activities.
2. Cryptoasset intermediaries – The FCA expects firms executing client orders to implement procedures to ensure prompt, fair and expeditious execution to client orders. It proposes to implement a set of best execution rules.
3. Cryptoasset lending and borrowing – The FCA is considering restricting firms from offering cryptoasset lending and borrowing products to UK retail customers.
4. Use of credit to purchase cryptoassets – The FCA is considering restricting firms from accepting credit as a means for consumers to buy cryptoassets.
5. Staking – The FCA puts forward key proposals to address technological risks, safeguarding risks and lack of consumer understanding on cryptoasset staking.
6. Decentralised Finance ("DeFi") – DeFi activities are not covered by the incoming UK cryptoasset regulatory regime where they are truly decentralised.

The DP process for this regime was complete in June 2025. The FCA will consider feedback to determine next steps and publish a consultation paper with draft rules.

Stablecoin issuance and cryptoasset custody

Document: CP25/14

This CP focuses on two of the new regulated activities to be introduced into the existing FSMA authorisation regime, namely the (i) issuance of “qualifying stablecoins” and (ii) the safeguarding of “qualifying cryptoassets”. Under these new rules, qualifying stablecoin issuers and qualifying cryptoasset custodians will be required to be authorised by the FCA to carry on these activities by way of business in the UK.

If a firm seeks to issue both e-money and qualifying stablecoins, they need permission for both activities. Both the e-money (as will be amended in May 2026, see FCA PS 25/12) and stablecoin regimes require firms to ensure robust safeguarding, guarantee redemption at par value, and comply with strong record-keeping, audit, and disclosure obligations as well as prudential requirements. However, the FCA has also stated that the stablecoin regime may potentially incorporate additional safeguards and oversight mechanisms to address the unique risks associated with cryptoassets, such as statutory trusts and independent third-party custodians. The FCA intends to consult on these additional measures in the future.

The CP defines a “qualifying stablecoin” as a “qualifying cryptoasset” referencing one or more fiat currencies that seeks or purports to maintain a stable value by the issuer holding fiat currency or fiat currency and other assets).

On top of needing to seek authorisation and comply with the conduct of business standards applicable to authorised financial services firms, qualifying stablecoin issuers will be required to:

• back qualifying stablecoins with secure, liquid assets in a statutory trust for qualifying stablecoin holders;
• offer redemption of qualifying stablecoins in exchange for money to all holders; and
• clearly disclose their policy for redemption and the composition of backing assets  to consumers.

This CP also introduces a new safeguarding regime for cryptoassets and includes the draft rules for a new CASS 17. CASS 17 introduces a new set of rules that apply to cryptoasset custodians in relation to qualifying cryptoassets (“QCAs”). QCAs are defined widely as “tokens that are transferable and fungible”, and include qualifying stablecoins.

Notably, the definition of QCAs specifically excludes cryptoassets that are also “specified investment cryptoassets” (“SICAs”, as defined in the amended art. 3 RAO). The FCA has stated in CP 25/14 that rules governing the safeguarding of SICAs will be published in a later CP expected in Q4 2025/Q1 2026 (i.e. the CP on trading platforms). In summary, SICAs are cryptoassets that are considered “specified investments” under the RAO, and includes security tokens and tokenised equity.

Under CASS 17, qualifying cryptoasset custodians will be required to:

• segregate client cryptoassets from their own;
• hold those qualifying cryptoassets on behalf of clients in a trust;
• have accurate books and records of clients’ cryptoassets holdings; and
• have adequate controls and governance to protect clients’ cryptoasset holdings.

These new rules largely mirror the existing custody rules in CASS 6 (which relate to “traditional” safe custody assets), but at the moment it is unclear how these separate rules interact, and if satisfaction of CASS 17 requirements will also satisfy CASS 6, and vice versa.

It is possible that requirements in CASS 6 and CASS 17 are intended to be mutually exclusive, especially considering SICAs are more likely to be covered by the CASS 6 definition of safe custody assets.

Prudential requirements for cryptoasset firms

Document: CP25/15

This CP introduces a new prudential regime for cryptoassets, including own funds, liquid assets, and concentration risk requirements. It seeks to align broadly with existing prudential frameworks but tailors them to crypto-specific risks.

The introduction of this structure reflects FCA’s long-term vision to establish an integrated prudential sourcebook that will apply common approaches across all FCA-solo regulated firms, supplemented by specific sourcebooks for each type of firm.

The FCA proposes to introduce an integrated prudential sourcebook that brings together core prudential requirements  ("COREPRU"), along with a sourcebook setting out sector specific requirements for firms doing regulated cryptoasset activities ("CRYPTOPRU"). Both COREPRU and CRYPTOPRU will apply to CRYPTOPRU firms.

The COREPRU will include rules on:

• overall financial adequacy;
• definition of own finds;
• own funds requirement (overall calculation);
• fixed overhead requirement;
• concentration risk monitoring; and
• basic liquid asset requirement.

The CRYPTOPRU will include rules on:

• permanent minimum requirement;
• K-factor requirement; and
• issuer liquid asset requirement.

The FCA will consult on the remaining requirements of the sourcebooks in a separate consultation.

This CP is expected to be substantial, and will cover the adaptation and application of the UK’s primary financial services legislation (the Financial Services and Markets Act 2000, or “FSMA”, and the FSMA Regulated Activities Order 2001 (the “RAO”)) to cryptoassets and cryptoasset services and activities. Under these new rules, relevant cryptoasset activities will be considered “regulated activities” and relevant cryptoasset service provider firms in the UK will be considered “regulated firms”.

This in turn means that the conduct rules and standards that apply to existing regulated firms will now apply to cryptoasset service firms. These include the FCA’s rules on:

• conduct of business;
• operational resilience;
• senior managers and certification; and
• financial crime;

as well as the FCA’s Consumer Duty (that applies to firms that have retail clients).