UK FCA Launches Crypto Consultations to Set Clear Rules Before 2027

Highlights:

• UK financial regulator launches public consultations on crypto markets, services, and user protection.
• FCA seeks feedback to shape rules that protect consumers and build trust.
• Crypto exchanges must follow clear rules for listings, disclosures, and fair trading practices.

The United Kingdom financial regulator has started a new phase in crypto oversight by launching several public consultations. The Financial Conduct Authority has released three consultation papers that focus on crypto markets, crypto services, and user protection. These consultations will stay open until February 12, 2026, which gives firms a long period to review the proposals and prepare their responses.

FCA’s Crypto Consultations Aims for Clear Rules and Safer Markets

The regulator explained that the main aim is to support responsible activity in the crypto sector while also making sure users clearly understand the risks linked to using crypto. The rules are not meant to remove all risk from crypto activities. Instead, the focus remains on clear conduct standards and transparent business practices across the industry.

David Geale, executive director for payments and digital finance at the Financial Conduct Authority, said that feedback from the industry will play a key role in shaping the final rules. He added that the objective is to create a regulatory regime that protects consumers, supports innovation, and helps build trust in the crypto market.

The consultation shows a change from earlier rules that mainly covered advertisements and Anti-Money Laundering checks. Now, the new papers explain how crypto markets should operate each day, using clear and simple standards.

Under these plans, crypto exchanges would need to follow clear rules for token listings, disclosures, and fair trading. At the same time, the Financial Conduct Authority outlined steps to reduce insider trading and price manipulation. This approach aims to align crypto activity more closely with traditional finance rules. The consultation also covers intermediaries involved in crypto trading. In this case, the regulator is asking for feedback on how these firms should manage customer information and trading practices while following shared and transparent standards.

Crypto staking services received special attention in the consultation. The Financial Conduct Authority asked how firms should clearly explain the risks linked to yield products that lock user funds. As a result, clear and visible risk warnings remain a key concern.

Crypto lending and borrowing services are also included in the review. In this area, the Financial Conduct Authority outlined safeguards designed to protect both borrowers and lenders during periods of market stress or sharp price changes. The regulator also stressed that feedback from firms and users will help shape how future rules apply to yield-based crypto services.

Decentralized Finance Raises Open Questions

Decentralized finance is also discussed in the consultation papers. The Financial Conduct Authority asked whether DeFi services, such as trading, lending, and borrowing without intermediaries, should follow expectations similar to those in traditional finance. However, the consultation does not set final rules for DeFi. Instead, it invites feedback on how oversight could work when no central operator is involved.

Geale reminded users that crypto assets are still mostly outside regulation at this time. He said that while work is ongoing with partners to deliver the United Kingdom’s crypto rules, people should remember that crypto remains largely unregulated, except for financial promotions and financial crime controls.

The consultations followed a government announcement made one day earlier. The UK government plans to introduce a bill to extend existing financial laws to crypto assets by October 2027. According to reports on Monday, the Finance Ministry said the legislation would place crypto firms under FCA oversight. The change would bring crypto companies under similar rules as other financial firms.