UK Financial Regulator Seeks Crypto Industry Feedback on New Investment Rules
The United Kingdom’s Financial Conduct Authority (FCA) has introduced new proposals aimed at improving the country’s investment landscape and is now seeking input from the crypto industry.
According to Cointelegraph, the FCA released both discussion and consultation papers, inviting cryptocurrency companies to provide feedback on plans to expand consumer access to investments while updating rules on client categorization and conflicts of interest.
The discussion paper noted that a major portion of underperformance on high-engagement trading apps comes from cryptoasset trading and contracts for difference (CFDs). The FCA warned that many users engage in crypto-related products without investment limits, risk warnings, or proper suitability checks — increasing the chances of financial loss.
In its consultation paper, the FCA clarified that having a personal investment history in speculative or high-risk products, including cryptoassets, does not automatically qualify a client as a professional investor. The regulator emphasized that clients must meet strict professional criteria, including the financial ability to absorb potential losses.
These proposed updates aim to simplify the FCA’s existing framework and shift greater responsibility to financial firms to ensure compliance. Companies offering crypto-related services or investment advice are encouraged to respond to the consultation by February and March.
The UK continues to grow as a key global hub for crypto businesses operating outside the United States. This comes at a time when regulatory direction in the U.S. remains uncertain. Recently, the UK passed legislation officially recognizing digital assets as property, strengthening legal clarity in cases involving asset recovery or insolvency. Additionally, the government is reportedly considering a ban on crypto donations to political parties as the market expands.
