FCA advances the next phase of crypto rules

What does this mean?

Regulating cryptoasset activities

The FCA sets out a package of proposed requirements for firms operating a cryptoasset trading platform (CATP) in the UK or serving UK consumers from overseas. Firms in scope would need FCA authorisation. International groups could structure their UK presence through a UK legal entity alone, or, where access to global liquidity is essential, through a UK subsidiary alongside a UK-authorised branch. These structures would be assessed on a case-by-case basis, with further guidance planned for 2026. 

The FCA notes that crypto markets are highly global and fragmented, and therefore the regime may not always achieve the same regulatory outcomes as traditional finance.

UK CATPs would be expected to define objective, non-discriminatory access criteria and operate non-discretionary matching rules. Platforms would publish these rules, maintain systems and controls proportionate to their business, monitor compliance and retain the ability to halt trading when necessary. CATPs should also be able to identify the party placing an order. Best execution would not apply to trades executed within the CATP’s non-discretionary environment.

On market-making, CATPs would identify and monitor users acting as market makers. Formal contracts would not be mandatory, but incentive schemes or commercial arrangements would need to be documented, disclosed and monitored.

For algorithmic trading, the FCA moves away from applying detailed MiFID standards. CATPs would instead set their own rules governing the use of algorithms, including thresholds and limits, monitor activity for compliance and market-abuse risks, and disclose the overall importance and nature of algorithmic trading.

Under the proposed market abuse regime for cryptoassets (MARC), CATPs would  maintain systems and controls to prevent, detect and disrupt market abuse. Only large CATPs, defined as those with annual average revenue of £10m or more, would carry additional obligations to monitor relevant on-chain activity and share information with other large CATPs.

Retail protections would require CATPs to ensure UK retail clients can only access cryptoassets admitted with a qualifying cryptoasset disclosure document (QCDD). CATPs would direct users to the relevant QCDD before an order is placed, publish a list of admitted assets and associated QCDDs, determine fungibility where relevant, and follow set steps when withdrawing an asset from trading.

On conflicts of interest, the framework would allow matched principal trading within the CATP entity under strict conditions, and principal dealing desks operated off platform. Affiliates could trade on the CATP subject to controls. The FCA does not seek to prohibit CATPs from issuing or admitting their own tokens but envisages disclosure and governance requirements. Activities creating credit exposure beyond settlement risk would need to be legally separated from CATP operation. The FCA has also decided not to proceed with its earlier idea of prohibiting CATPs from admitting tokens in which they have an interest, provided conflicts-of-interest rules are followed.

Transparency measures would apply pre-trade only to CATPs and principal dealers above the £10m revenue threshold, with waivers available for trades that could significantly affect the market. Post-trade transparency would apply to all CATPs and principal dealers, with deferrals permitted. CATPs would maintain order and transaction records for five years and report executions to clients on the day of the trade.

Settlement arrangements would need to ensure timely and effective settlement, whether internalised or external, with more detailed rules to follow in 2026.  

 The FCA discusses extending the wider cryptoasset regime to DeFi where a controlling person can be identified, with fully decentralised arrangements remaining out of scope. Given heightened operational and financial crime risks and industry support for this direction, the FCA plans further consultation on guidance for assessing decentralisation and managing associated risks.

Admissions, disclosures and market abuse

The FCA sets out proposals for a new admissions and disclosures regime for qualifying cryptoassets admitted to trading on a CATP. The regime would use QCDDs and supplementary disclosure documents as point-in-time disclosures at admission. CATPs would set and publish objective, risk-based admission criteria, carry out due diligence before admitting an asset, assess whether QCDDs meet the statutory material-information requirement and are true and not misleading, and decline admissions likely to be detrimental to retail investors. CATPs would publish QCDDs, file them with an FCA-owned repository such as the national storage mechanism and maintain an updated list of documents. Intermediaries serving UK retail clients would deal only in qualifying cryptoassets supported by an A&D-compliant QCDD.

QCDDs would include all material information a prospective investor needs, following CATP rules on clarity, format and content, including governance, technology, risks and identifiers. A short summary of key information would be required, with clear identification of responsibility for the document, withdrawal rights where relevant and any conflicts of interest. A voluntary protected forward-looking statements framework is also proposed.

Several elements have been refined following feedback to DP24/4. CATPs would not disclose due-diligence findings in QCDDs and would instead note any information they could not verify. Verification expectations have been moderated. CATPs would not be required to review third-party code audits, and machine-readable QCDDs would not be mandated. On-chain monitoring and cross-platform information sharing would apply only to large CATPs. The FCA does not propose introducing PDMR-style (person discharging material responsibility) disclosure obligations. The FCA also intends to disapply the Consumer Duty from the A and D regime, replacing it with bespoke disclosure requirements that aim to deliver similar outcomes in a more targeted way.

For UK-issued qualifying stablecoins, issuers would provide website disclosures and a stablecoin-specific QCDD containing the same information and updated on the same schedule. CATPs could use this document when admitting the stablecoin.

The FCA also proposes a cryptoasset market abuse regime, covering insider dealing, unlawful disclosure and market manipulation, supported by inside-information disclosure duties and systems and controls. Large CATPs would additionally monitor relevant on-chain activity and share information with other large CATPs to help detect and disrupt market abuse.

Prudential regime

The FCA is consulting on the remaining prudential rules for cryptoasset firms, building on earlier proposals in CP25/15. The framework would sit across two sourcebooks: COREPRU (cross-sector rules) and CRYPTOPRU (crypto-specific  rules). It would cover cryptoasset trading platforms, staking, arranging and dealing (as agent and principal), including lending and borrowing.

Firms would have to hold a minimum level of capital (the “own funds requirement”), made up of three elements: a permanent minimum, a fixed overheads requirement and activity-based measures. The capital regime is consistent with IFPR, leveraging an adjusted “K factor” approach covering capital underpinning the volume of client orders, proprietary trading and staking, and with exposure to market, counterparty and concentration risk. The FCA aims to align with existing MiFID investment firm rules where possible, while adjusting for specific crypto risks. Earlier proposals to limit lending and borrowing services to qualifying stablecoins have been dropped, meaning firms could continue to offer lending and borrowing in other cryptoassets subject to the broader prudential and conduct requirements.

All cryptoasset firms would also need an overall risk assessment process, like ICARA. This would require them to identify key harms, plan and stress test their business model, set recovery options and maintain credible wind-down plans. From this, firms would derive their own view of the capital and liquid assets they need to meet an overall financial adequacy rule. Group risks would need to be assessed explicitly, but there would be no separate group prudential regime at this stage. The FCA has confirmed it will not take forward earlier ideas for a standalone prudential framework for cryptoasset groups and will instead expect firms to address group-level risks within their overall risk assessment.

Alongside this, the FCA plans a tailored disclosure regime so stakeholders can understand a firm’s prudential strength and risk management. Firms would publish accessible information at least annually on their risk profile, capital position, key prudential metrics and, where relevant, group relationships. Further consultation on regulatory reporting is scheduled for 2026, and the FCA flags that treatment of some third-country exposures, including non-UK stablecoins, may evolve over time.

Recent FCA consumer research shows that crypto ownership in the UK has stabilised, with most holders viewing crypto as a speculative investment rather than a means of payment. Awareness of risks has increased, yet many consumers still underestimate the likelihood of losing money and rely heavily on social media for information. The research also highlights growing use of lending, borrowing and staking products among more experienced users, reinforcing the need for clearer disclosures and stronger protections across the market.

What do firms need to do?

Firms should treat the consultations as the operating manual they will soon be held to. The priority is to map every business line to the proposed perimeter and identify whether the firm will fall into scope as a CATP, intermediary, staking provider, lender or borrower. International groups need to start assessing which UK structure is most likely to work for them under the emerging regime, recognising that a simple UK legal entity may or may not be sufficient and that a UK subsidiary plus an authorised branch could ultimately be required to maintain access to global liquidity.

CATPs should perform initial gap assessments against the draft rules. This includes objective access criteria, matching rules, an approach to market makers and algorithmic trading, and a complete admissions and disclosures process that reflects the FCA’s plans for a bespoke disclosure regime. Larger platforms should explore the operational impact of on chain monitoring and information sharing, recognising that these expectations will scale with revenue.

All firms should estimate the capital and liquidity requirements that would underpin future business. The FCA has stepped back from stablecoin-only lending restrictions and from a bespoke prudential regime for groups, so firms should reassess capital, liquidity and group-risk dependencies through the lens of the overall risk assessment. These insights will help firms prepare and feed into meaningful responses ahead of the February 2026 consultation response deadline.

Finally, firms should consider where they need to develop solutions in-house, where technology firms or managed service vendors can provide scalable solutions and where concerted work on industry utilities provides the most effective solution.

Next steps

The consultations close on 12 February 2026. The FCA is set to publish all cryptoasset framework-related policy statements in 2026.