The Financial Conduct Authority (FCA), the UK’s financial regulatory body, has proposed implementing stricter regulations on the cryptocurrency market. This move aims to mitigate risks associated with digital assets and could result in banning unlicensed companies from issuing public cryptocurrency offers.
Proposed Regulatory Measures
The FCA released a discussion paper on December 16, outlining plans to prohibit non-regulated entities from conducting public crypto offerings. The proposed measures are designed to ensure that cryptocurrency-related promotions comply with established financial laws and prioritize consumer protection. The FCA also suggests that authorized firms, such as licensed crypto trading platforms, share information and implement robust monitoring systems to detect and prevent suspicious activities.
Recent FCA Actions and Warnings
To refine these proposed measures, the FCA has invited feedback from the public and industry stakeholders. The consultation period is open until March 2025. This initiative forms part of a broader effort to establish a comprehensive regulatory framework for the UK’s cryptocurrency market by 2026. On December 3, the regulator restricted access to Pump.fun, a platform suspected of offering unauthorized financial services, warning of significant risks to UK consumers.
Existing Crypto Regulations in the UK
The FCA’s recent proposals build on earlier regulations introduced in 2023, which banned unregistered crypto companies from marketing or promoting their services to UK residents. Since 2020, the FCA has closely monitored compliance with anti-money laundering (AML) regulations in the cryptocurrency sector. Clear admissions, disclosures, and market abuse rules will help improve the integrity of our crypto markets, while protecting people and supporting the UK's growth and competitiveness.
These proposed measures represent a significant step towards creating a safer investment environment in the UK. They aim to set forth strong controls to minimize potential harm and fraud in the rapidly expanding cryptocurrency market of the country.
