Highlights
- The UK’s Financial Conduct Authority has launched a new consultation proposing a ban on public cryptocurrency offerings by unregulated entities.
- The consultation is expected to be completed in March 2025, and the market watchdog will implement the draft regulations by 2026.
- The move builds on existing restrictions on the promotion of unregistered cryptocurrencies to UK residents.
The UK’s Financial Conduct Authority (FCA) has published a new consultation document proposing a complete ban on the issuance of cryptocurrencies by companies outside its jurisdiction. The move is part of the country’s efforts to strengthen its grip on the rapidly evolving cryptocurrency sector.
The proposal, detailed in discussion paper DP24/4, seeks to establish strong rules governing the acceptance and disclosure of cryptocurrency assets, while expanding measures to curb market abuse. According to Monday’s announcement, the plan builds on previous restrictions last year, including a ban on promoting unregistered cryptocurrencies.
Strengthening consumer protection and market confidence
The FCA said the main aim of the proposed ban was to reduce risks to consumers and ensure market integrity. Regulators believe that targeting unregulated companies will help prevent fraud, manipulation and other illegal activities that have long been associated with the cryptocurrency sector.
Key objectives outlined by the market watchdog include improving regulatory clarity, empowering consumers by requiring companies to provide comprehensive disclosures, and fair market practices.
The FCA’s initiative represents a broader strategy to bring cryptocurrency activity under regulation. Current powers include anti-money laundering (AML) compliance and limiting unregistered promotions, but the new rules extend to core activities such as cryptocurrency trading, custody and stablecoin regulation.
The framework restricts unregulated companies from offering cryptocurrencies to the public, although the FCA has outlined potential exceptions for approved trading platforms and companies that meet certain regulatory criteria.
The details of these exceptions are still being discussed, but the FCA is inviting input from industry participants and other stakeholders.
UK to finalize new consultation in March 2025
The FCA is actively seeking feedback from a range of stakeholders, including cryptocurrency companies, traditional financial institutions, academia and consumer groups. The regulator aims to address industry concerns through policy roundtables and consultations, while ensuring the rules are comprehensive and effective.
According to the announcement, public consultation on the new regulations will continue until March 2025. Draft legislation to formalize the FCA’s proposals is expected to be drawn up in 2025, with the full regulatory framework due to be in place by 2026.
The proposals highlight the FCA’s efforts to find a balance between promoting technological progress and protecting consumers. Recognizing the potential of blockchain and digital assets, regulators aim to create an environment that supports innovation while addressing the risks of fraud and abuse.
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Chimamanda is a cryptocurrency enthusiast and experienced writer focused on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in emerging economies. She combines her passion for blockchain technology with her love of travel and food to bring a fresh and engaging perspective to her work.
