FCA consults on UK crypto rules for exchanges, lending and DeFi

cointelegraphPublished on 2025-12-16Last updated on 2025-12-16

Abstract

The UK's Financial Conduct Authority (FCA) has launched consultations on proposed rules for crypto asset markets, covering exchanges, intermediaries, staking, lending, borrowing, market abuse, and DeFi. The proposals aim to support innovation while ensuring consumer protection and market integrity. Responses are open until February 2026. The rules would impose clearer standards on exchanges, align market abuse measures with traditional finance, and address risks in staking and lending services. The FCA is also considering whether DeFi activities should face similar regulatory expectations. This follows the UK government's plan to extend existing financial laws to crypto assets by 2027. The FCA emphasized that crypto remains largely unregulated at present.

The United Kingdom’s Financial Conduct Authority (FCA) has launched a series of consultations on proposed rules for digital asset markets, marking the next phase in the government’s effort to establish a comprehensive regulatory framework for crypto assets.

The proposals, published across three consultation papers, cover crypto trading platforms, intermediaries, staking, lending and borrowing, market abuse, disclosures and decentralized finance (DeFi). The FCA said consultation responses are open until Feb. 12, 2026.

The regulator stated that the proposals aim to support innovation while ensuring that consumers understand the risks associated with crypto investment. The watchdog said regulation should not eliminate risks entirely but ensure that participants operate responsibly and transparently.

“Our goal is to have a regime that protects consumers, supports innovation and promotes trust,” said David Geale, the FCA’s executive director for payments and digital finance, adding that industry feedback will help shape the final rules.

From advertisements to market structure

The consultations mark the next step in the U.K.’s push toward full “market structure” rules for crypto, moving beyond earlier requirements focused on financial promotions and Anti-Money Laundering compliance.

Under the proposals, exchanges would face clearer standards around admissions, disclosures and trading integrity. In addition, measures against insider trading and market manipulation would align crypto markets more closely with traditional finance.

The consultation also focuses on crypto staking services. The regulator seeks views on how firms should disclose risks when offering yield-bearing products that lock customer assets. Crypto lending and borrowing are also included in the consultation, with proposed safeguards intended to protect borrowers and lenders.

Another element of the consultation is decentralized finance (DeFi). The FCA consults on whether DeFi activities, including trading, lending and borrowing without intermediaries, should be subject to the same regulatory expectations as traditional financial services.

While consultations are ongoing, Geale reminded users that the assets are currently unregulated.

“While we work closely with partners to deliver the UK’s crypto rules, people should remember crypto is largely unregulated – except for financial promotions and financial crime purposes,” Geale warned.

Related: UK crypto lobbying group joins Digital Chamber in cross-border policy push

UK seeks to extend finance laws to crypto

The consultation was launched the day after the UK government announced its plan to introduce a bill to extend the country’s financial sector laws to crypto assets by 2027.

On Monday, the UK finance ministry reportedly announced that it will introduce legislation to bring crypto companies under existing financial laws by October 2027. This would put crypto under the oversight of the FCA.

UK Chancellor Rachel Reeves said bringing crypto into the regulatory perimeter is a “crucial step” in securing the UK’s position as a financial center in the digital age.

Magazine: Meet the onchain crypto detectives fighting crime better than the cops


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