UK financial regulator The FCA has taken its next steps to set crypto market and trading regulation in the UK, announcing that it is seeking feedback on plans to improve the transparency of the UK’s crypto markets.

We recently reported that FCA research shows that about 12% of UK adults now own crypto.

The regulator said that clear crypto regulation will improve the integrity of the UK’s crypto markets, help protect people, and support the UK’s growth and competitiveness. Admissions and disclosures and market abuse regimes are crucial to improving the integrity and cleanliness of our crypto markets, as well as helping people make informed financial decisions.

The FCA’s Discussion Paper DP24/4 (Admissions & disclosures and market abuse regime for cryptoassets) is part of a series of publications that are designed to help us shape the UK’s crypto regime. It sets out proposals for firms to introduce strong controls that prevent harm. The regulator is also suggesting certain firms, like authorised crypto trading platforms, share information with each other to help stop suspected market abuse. This will reduce fraud and help promote good practices in the sector.

The new proposals aim to reduce risks without stifling growth and innovation. The FCA aims to reduce consumer harms and promote confidence and trust in the UK cryptoasset market by:

• improving regulatory clarity so that there are clear and consistent ‘rules of the game’ for firms and consumers,
• making sure consumers have the information they need before buying or selling cryptoassets,
• requiring controls and processes to bring about fair and orderly trading conditions, and
• further reducing risks of money laundering and losses to fraud.

The FCA is encouraging the crypto industry to share its expertise and help it shape the rules. The regulator wants industry to take the lead in developing new ways of disclosing important information, to make sure people understand the risks before purchasing crypto.

The Discussion Paper reflects insights gained from a series of FCA-led crypto roundtables held with the industry earlier in the year. It also builds on the Government’s earlier consultation.

The FCA added that it wants to develop a crypto regime that is fair, balanced and proportionate for all. It needs input from the Government, international partners, industry and consumers to help get the future rules right. Contributors have until 14 March 2025 to give The FCA feedback.

The regulator continues to remind people that while it continues to develop the UK’s crypto regulation, crypto remains largely unregulated in the UK and high risk. If something goes wrong, it is unlikely you will be protected and you should be prepared to lose all your money.

The FCA’s Discussion Paper DP24/4 – Admissions & disclosures and market abuse regime for cryptoassets – can be seen in full here.