- FCA aims to introduce a market abuse framework for cryptocurrencies, focusing on consumer protection, market integrity, and international competitiveness.
- The proposed regulations will cover anyone involved in market abuse with crypto assets on U.K. platforms, regardless of their location.
- FCA plans to recover costs for regulating stablecoins and expanding financial promotions, totaling GBP 6.4 million.
The Financial Conduct Authority (FCA) of the United Kingdom plans to introduce a market abuse framework for cryptocurrencies within this year, as stated in its Tuesday business strategy. The strategy outlines objectives to safeguard consumers, uphold the integrity of the market, and promote international competitiveness. Following a consultation by the government last year, there were proposals for establishing a regulatory framework to address market abuse in the crypto sector.
“The market abuse offenses would apply to all persons committing market abuse on a crypto asset that is admitted (or requested to be admitted) to trading on a U.K. crypto asset trading venue. This would apply regardless of where the person is based or where the trading takes place.”
UK Government
In its response to the cryptocurrency consultation in October, the government mentioned that the proposed market abuse regulations would cover any individual involved in market abuse activities concerning a crypto asset that is either listed or proposed to be listed on a U.K. cryptocurrency trading platform. This coverage extends irrespective of the individual’s location or the site of the trading activities. For instance, under the new regulations, cryptocurrency exchanges would be obligated to identify and prevent market abuse practices.
The Financial Conduct Authority (FCA) serves as the primary regulator for cryptocurrencies in the nation. To date, the FCA has introduced a promotional framework for cryptocurrencies that mandates the inclusion of risk warnings and imposes a 24-hour waiting period for novice purchasers. Additionally, the FCA has been exploring a regulatory framework for stablecoins.
“We do know many [firms] are nervous about their interpretation of the guidance and as such will be taking a slow and cautious approach to their future financial promotions.”
Su Carpenter, director of operations at lobby group CryptoUK
In its 2024 to 2025 strategy document, the authority also expressed its intention to recoup “GBP 6.2 million [$7.9 million] in costs associated with the new regulation of stablecoins and the broader framework, in addition to GBP 200,000 for the expansion of the financial promotions boundary.” However, the strategy did not specify the methods for achieving this financial recovery.
