UK FCA Proposes Strict Cryptocurrency Rules

• FCA proposes banning public offerings by unregulated companies.
• Rules include data sharing between authorized platforms.
• Public consultation for regulations remains open until March 2025.

The UK's Financial Conduct Authority (FCA) has revealed a detailed proposal for Strengthen regulations on the cryptocurrency market. The initiative, announced on December 16, seeks to limit the risks associated with cryptocurrencies by prohibiting public offerings by unregulated companies and promoting greater transparency.

The UK's Financial Conduct Authority (FCA) released a discussion paper (not law!), which sets out a crypto regulatory roadmap and an initial steer on how the FCA may regulate crypto & crypto asset public offerings (ICOs)

A brief overview, link to paper & brief analysis below 👇 pic.twitter.com/8awdyTB2vZ

— Andre Omietanski (@punk6052) December 16, 2024

The discussion paper published by the FCA invites feedback from firms, legal experts and the public by March 2025. The consultation is part of a wider strategic plan, with a full regulatory framework expected to be implemented by 2026. The FCA said the proposals are an essential step towards “protecting consumers and ensuring that cryptocurrency promotions are regulated and comply with financial laws.”

Among the key measures, the FCA suggests that authorized trading platforms share information to identify and prevent market abuse. This is intended to strengthen the integrity of the sector and prevent suspicious activities, such as market manipulation and fraud. “We are suggesting that certain firms, such as authorized platforms, share information with each other to help prevent market abuse,” the regulator highlighted.

Additionally, the new rules ban unregistered companies from running cryptocurrency promotions in the UK, an extension of guidelines introduced in 2023. Since 2020, the FCA has stepped up monitoring of crypto companies to ensure compliance with anti-money laundering laws.

The FCA has also been taking direct action against platforms operating without authorization. On December 3, the authority blocked access to the Pump.fun website, accusing the platform of offering financial services without approval and posing significant risks to consumers in the UK.

These actions reflect the UK government’s growing concern about investor safety in a market that, despite being innovative, is often associated with scams and fraudulent projects. Recent data indicates that the UK is responsible for 7% of global cryptocurrency scams between 2022 and 2024.

The UK government plans to introduce draft legislation in 2025 covering trading activities, stablecoins, asset custody and more. Full implementation is expected by 2026, with a focus on creating a safe environment for consumers and encouraging sustainable market growth.