The UK's Financial Conduct Authority (FCA) has unveiled its most comprehensive proposal to date for the regulation of cryptoassets, signaling a definitive end to the sector's "Wild West" era in Britain. The detailed consultation paper, published on Wednesday, September 17, 2025, maps out a clear path towards bringing all cryptoasset firms under full UK crypto oversight by 2026. The proposed FCA crypto regulation would adapt the same rigorous standards that govern traditional finance to the digital asset industry, with a heavy focus on senior management accountability, operational resilience, and robust consumer protection.

• The UK's top financial watchdog has unveiled its detailed blueprint for policing the crypto industry.
• Discover the key rules from traditional finance, including one born from the 2008 crisis, that are now being applied to crypto executives.
• Learn about the powerful new consumer protection measures that could fundamentally change how crypto products are sold in Britain.

This announcement solidifies the UK's post-Brexit path on digital asset policy. While the European Union has implemented its bloc-wide EU MiCA regulation, a system currently facing its own internal challenges over "passporting" rights, the UK is forging its own bespoke national framework. This proposal from the FCA is the most granular look yet at what that framework will entail, following draft legislation from HM Treasury that officially expanded the regulator's authority. The FCA is now seeking industry feedback on its proposals, with a final, binding rulebook expected to be in place by 2026.

A central and perhaps most impactful pillar of the proposed FCA crypto regulation is the full application of the Senior Managers Regime (SMR). Introduced in the banking sector following the 2008 financial crisis, the SMR is designed to instill a culture of individual accountability. If applied to crypto, it would mean that senior executives at exchanges and custody firms would be held personally responsible for failings at their companies, facing significant fines or even bans from the industry. This is a dramatic cultural shift from the historical opacity of many crypto operations, aimed at ensuring clear lines of responsibility.

Equally transformative is the FCA's proposal to apply its flagship Consumer Duty to the crypto sector. This powerful regulation requires financial firms to act to "deliver good outcomes for retail customers," a much higher standard than simply treating them fairly. Under this duty, crypto platforms would be legally obligated to design their products, services, and communications to avoid causing foreseeable harm to consumers. This could lead to a radical overhaul of how cryptoassets are marketed in the UK, moving away from hype-driven advertising and towards more balanced and clear risk disclosures.

For the first time, UK consumers may also gain a formal safety net for disputes. The FCA is consulting on integrating cryptoasset complaints into the Financial Ombudsman Service. This would provide users with a free, independent body to seek redress for issues like unfairly frozen accounts, operational glitches, or mis-sold products. While the FCA acknowledges that the inherent volatility of cryptoassets will remain a risk for investors, these measures aim to protect them from poor business practices, operational failures, and fraud. The entire push for UK crypto oversight is designed to build a sustainable and trusted market.

The UK's detailed, principles-based approach is part of a broader global race among major financial centers to establish themselves as the preeminent hub for regulated digital assets. This move to create a clear, comprehensive rulebook runs parallel to efforts in the United States, where regulators are also working to provide clarity, as highlighted by the recent joint SEC/CFTC statement on collaboration. The FCA's framework is designed to create an environment where institutional players feel secure, a necessary step as major exchanges like Nasdaq push to list tokenized assets and require trusted, regulated partners and venues.

The coming months of consultation will be a critical test for the UK crypto industry. It will reveal the sector's readiness to embrace the same level of rigor and accountability as traditional finance. The FCA has stated its goal is to balance innovation with market integrity. By proposing to bring crypto firms under full UK crypto oversight, the regulator is making a clear bet that the future of digital assets lies not in a separate, unregulated world, but in its full integration into the mainstream financial system.

Expert Opinion and Quotes

“We want to develop a sustainable and competitive crypto sector – balancing innovation, market integrity and trust. Our proposals won’t remove the risks of investing in crypto, but they will help firms meet common standards so consumers have a better idea of what to expect.” — David Geale, Executive Director of Payments and Digital Finance at the FCA - Source

FAQs

What is the FCA proposing for crypto regulation?
The FCA has proposed a new framework for FCA crypto regulation that aims to bring all cryptoasset firms under full UK crypto oversight by 2026. It involves adapting existing financial services rules to the crypto sector.

What is the Senior Managers Regime?
The Senior Managers Regime (SMR) is a UK regulation that holds senior individuals within financial firms personally accountable for any misconduct or failings that happen on their watch. Applying it to crypto would make executives directly responsible for their firm's compliance.

What is the Consumer Duty and how will it affect crypto?
The Consumer Duty is a powerful UK rule that legally obligates financial firms to act in the best interests of their retail customers and deliver good outcomes. For crypto, this would mean stricter rules on marketing, product design, and risk disclosure to protect consumers from foreseeable harm.

Will UK crypto investors have a way to settle disputes?
Yes, the FCA is proposing to include cryptoasset-related complaints within the scope of the Financial Ombudsman Service. This would give consumers a free and independent body to resolve disputes with regulated crypto firms.