UK FCA Proposes Ban on Crypto Offerings by Unregulated Firms
The Financial Conduct Authority (FCA) of the United Kingdom has issued a consultation paper proposing a ban on crypto offerings by firms not regulated under its jurisdiction. This initiative aims to enhance regulation in the rapidly evolving crypto sector.
Detailed in Discussion Paper DP24/4, the proposal seeks to establish rules for admission and disclosure of crypto assets and expand measures against market abuse. This follows previous restrictions, including bans on unregistered crypto promotions last year, as noted in the announcement.
Strengthening Consumer Protection and Market Confidence
The FCA's primary goal is to mitigate risks to consumers and ensure market integrity. The regulator aims to prevent fraud, manipulation, and illicit activities associated with the crypto sector by targeting unregulated firms.
Key objectives include improving regulatory clarity, requiring comprehensive disclosures from firms, and promoting fair market practices. The FCA's strategy extends beyond current anti-money laundering compliance and unregistered promotion restrictions to cover crypto trading, custody, and stablecoin regulation.
The proposed framework will restrict non-regulated firms from offering cryptocurrencies to the public, with potential exceptions for authorized trading platforms and firms meeting specific criteria. Details of these exceptions are still under discussion, and the FCA invites input from industry participants and stakeholders.
UK to Conclude New Consultation in March 2025
The FCA seeks feedback from various stakeholders, including crypto firms, traditional financial institutions, academics, and consumer groups. Through policy roundtables and consultations, the regulator aims to address industry concerns while ensuring comprehensive and effective rules.
Public consultations will remain open until March 2025, with draft legislation expected in 2025 and a full regulatory framework planned for implementation by 2026. This proposal reflects the FCA’s commitment to balancing technological progress with consumer protection, aiming to foster innovation while addressing risks of fraud and abuse.