As a seasoned analyst with over two decades of experience in financial markets and regulatory compliance, I must admit that the UK’s proposed crypto asset regulation for 2026 seems like a prudent step forward. The Financial Conduct Authority (FCA) has taken commendable strides towards ensuring transparency and accountability in this rapidly evolving digital landscape.
2026 could bring regulatory measures for cryptocurrencies to the United Kingdom, according to the Financial Conduct Authority (FCA). As part of this ongoing process, the FCA recently published a discussion paper detailing proposals for admissions, disclosures, and regulations against market abuse.
What to admit and how
According to the proposed changes, the Financial Conduct Authority (FCA) will gain jurisdiction over a wider range of responsibilities, including overseeing crypto asset trading, regulating stablecoins, managing intermediation, custody services, and related activities.
Financial products such as tokenized securities and investment tools are currently governed under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
The FCA foresees allowing crypto asset offerings only through exemptions:
“Public offers will be prohibited unless an exemption applies. For example, when made via admission to trading on a CATP [crypto asset trading platform] or when only available to qualified investors, such as institutional investors.”
After an exemption is granted and proper investigations and disclosures are completed, it’s up to the CATP’s discretion to accept the asset. Public disclosures must meet specific standards; otherwise, we reserve the right to compel a company to offer redress for violations of the financial promotions regulations.
Who stops the abusers?
A civil market abuse regime exists for traditional finance in the United Kingdom, but it has already been determined that the regime cannot be transferred directly to crypto assets. The FCA acknowledged the influence of the International Organization of Securities Commissions (IOSCO) crypto and digital asset market recommendations on its proposals.
As indicated by the FCA, the government’s official response to their consultation suggests a plan to enable cross-platform data sharing via legislation. In simpler terms, this means that the FCA is aiming to pass laws that will allow different trading platforms to share information with each other.
“For example, if CATP 1 offboards User A, and where User A has an existing account with CATP 2, information gathered by CATP 1 on User A’s suspected market abuse behaviour could be shared with CATP 2. Such information could help CATPs to make more informed decisions.”
HM Treasury first released its plans for a crypto regulatory framework in February 2023.
In November 2024, the newly elected government reaffirmed its commitment to the original plan, but with modifications regarding execution, abandoning the staged approach. The Financial Conduct Authority (FCA) plans to discuss stablecoin regulations independently. They are seeking input on the 49 questions outlined in the document from both domestic and international interested parties, particularly those involved in the wholesale sector, until March 14, 2025.
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2024-12-16 21:07