The Financial Conduct Authority (FCA) has published a series of Consultation Papers (CP25/40, CP25/41 and CP25/42) that collectively outline the UK’s future regulatory framework for cryptoassets. These proposals mark a pivotal shift, bringing a wide range of cryptoasset activities squarely within the FCA’s regulatory perimeter for the first time.
The FCA is now seeking industry feedback on its proposals, signalling a critical moment for cryptoasset firms operating in, or planning to enter, the UK market. These consultations follow HM Treasury’s laying of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, expanding the FCA’s remit beyond financial promotions and anti-money laundering oversight.
Firms should now begin assessing how these developments may affect their business models, governance arrangements and compliance obligations. This article provides a high-level overview of the FCA’s cryptoasset consultation package and highlights the key areas that firms should be preparing for without delay.
A New Regulatory Era for Cryptoassets
The FCA’s consultation package supports four clear regulatory objectives:
- Enhancing consumer protection;
- Strengthening market integrity;
- Promoting effective competition; and
- Supporting the UK’s international competitiveness and growth.
To achieve these aims, the FCA’s three Consultation Papers focus on the following pillars:
- Authorisation and conduct standards (CP25/40);
- Market integrity and disclosure obligations (CP25/41); and
- Prudential standards and financial resilience (CP25/42).
These proposals lay the groundwork for a comprehensive regime that aligns cryptoasset firms with the standards already applied to traditional FCA-regulated financial services firms.
CP25/40 – Regulating Cryptoasset Activities
Who Will Need FCA Authorisation?
Under CP25/40, firms carrying out cryptoasset activities “by way of business” in the UK will be required to obtain FCA authorisation. This includes firms operating trading platforms, acting as intermediaries, offering cryptoasset lending or borrowing products, providing staking services and certain decentralised finance arrangements where there is a clear controlling entity. Overseas firms servicing UK clients may also fall within scope, depending on their business model and client engagement.
Key Themes:
- Mandatory FCA authorisation for in-scope cryptoasset activities.
- Governance, systems and controls, conflict management and operational resilience expectations.
- Additional scrutiny for platforms offering direct retail access.
- Alignment with the FCA’s wider conduct requirements, including the Consumer Duty (PRIN 2A).
This represents a substantial departure from the current environment, in which many cryptoasset businesses operate with limited or no regulatory oversight. Firms should consider this consultation period as a strategic window for preparation.
CP25/41 – Admissions, Disclosures and Market Abuse
CP25/41 introduces two core regimes:
- The Admissions and Disclosures (A&D) regime for qualifying cryptoassets; and
- The Market Abuse Regime for Cryptoassets (MARC)
Admissions and Disclosures (A&D)
Cryptoassets admitted to trading on UK-authorised Crypto Asset Trading Platforms (CATPs) will be required to publish a Qualifying Cryptoasset Disclosure Document (QCDD). These are intended to improve transparency, reliability and comparability of information for both consumers and market participants.
A key feature of the QCDD regime is its formal liability framework. Issuers, offerors and intermediaries may be held accountable for misleading statements or material omissions in their disclosures. Consequently, trading platforms will need robust due diligence and review mechanisms to mitigate consumer harm.
Market Abuse Regime for Cryptoassets (MARC)
MARC extends core market abuse provisions, including prohibitions on insider dealing, unlawful disclosure of inside information and market manipulation, into cryptoasset markets. Although adapted to cryptoasset characteristics, the rules aim to address fraudulent practices and abusive behaviours that erode market confidence.
Together, these proposals significantly raise expectations around transparency and market integrity in the UK crypto sector.
CP25/42 – A Prudential Regime for Cryptoasset Firms
CP25/42 introduces a new prudential framework, COREPRU and CRYPTOPRU, for cryptoasset firms that will require FCA authorisation. This regime draws from existing frameworks such as MIFIDPRU but is adapted to reflect the unique risks of crypto business models.
Key Proposals
- Minimum own funds requirements;
- Capital adequacy and liquidity standards;
- An “overall risk assessment” process, akin to the Internal Capital and Risk Assessment (ICARA) under MIFIDPRU; and
- Public disclosure of prudential information.
These requirements are designed to ensure firms are financially resilient, capable of orderly wind-down and positioned to protect consumers from harm in the event of failure.
For many firms, especially those with limited capital buffers or complex structures, this regime may significantly increase compliance costs and reshape long-term viability planning.
FCA Consultation Timeline and Industry Engagement
The FCA is seeking feedback on all three consultation papers, with responses due by 12 February 2026. Stakeholders are encouraged to engage early, given the novelty and complexity of the proposals.
Final rules and guidance are expected following the conclusion of the consultation period, forming part of the FCA’s broader Cryptoasset Roadmap.
What Should Firms Be Doing Now?
In preparation for the upcoming regime, firms should take the following steps:
- Map existing and proposed activities to determine whether FCA authorisation will be required;
- Review governance, risk and compliance frameworks for alignment with FCA expectations;
- Assess financial planning and capital buffers in light of the new prudential standards;
- Prepare for enhanced disclosure obligations and market abuse compliance; and
- Start gap analysis and documentation planning for FCA authorisation in 2026.
These actions will be essential for ensuring readiness when the regime comes into force.
How Can Complyport Help?
The proposed FCA cryptoasset regime directly impacts firms across authorisation, prudential resilience, governance and market integrity. Complyport supports firms in meeting these requirements through the following services:
- Annex 1 registrations for firms intending to conduct crypto activities;
- Registration as a Crypto-Asset Firm and tailored documentation required as part of the registration;
- Prudential framework design and capital adequacy assessments;
- Governance, systems and controls reviews;
- Market abuse controls and compliance frameworks; and
- Ongoing compliance support and regulatory advisory.
Speak to our experts today to ensure your firm is prepared for the UK’s evolving crypto regulatory landscape.
Ask ViCA, your Virtual Compliance Assistant. Claim your complimentary 20 queries today! Register here: https://vica.chat
