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UK FCA Crypto Regulation: bringing crypto activities under FSMA.

18/12/2025

THREE CONSULTATION PAPERS (CPS) built on CP25/15  

THE  proposed new FCA prudential rules for all cryptoasset firms and  consultation paper (CP) build on CP25/15  

TIMELINE

  • 15 December 2025, HM Treasury introduced the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, bringing crypto activities under FSMA.
  • 16 December 2025, the FCA published three consultation papers (CPs) that define the full regulatory perimeter for crypto in the UK.
    • SEE BELOW
  • 12 February 2026. Deadline for responses to  three consultation papers (CPs)
  • October 2027. Full implementation expected

FCA THREE CONSULTATION PAPERS (CPS)

  1. CP25/40 – Regulating Cryptoasset Activities https://www.fca.org.uk/publications/consultation-papers/cp25-40-regulating-cryptoasset-activities
  • Defines who is regulated and which activities fall under FSMA (trading platforms, custody, staking, lending, DeFi).
  • Requires UK presence for Cryptoasset Trading Platforms (CATPs) serving retail clients.
  • Covers governance, conflicts of interest, transparency, safeguarding, and operational standards.
  1. CP25/41 – Admissions, Disclosures & Market Abuse https://www.fca.org.uk/publications/consultation-papers/cp25-41-regulating-cryptoassets-admissions-disclosures-market-abuse-regime-cryptoassets
  • Introduces market integrity rules for cryptoassets admitted to trading.
  • Applies disclosure obligations, insider trading prevention, and anti-manipulation measures.
  • Aligns crypto with traditional public market standards.
  1. CP25/42 – Prudential Regime for Crypto Firms https://www.fca.org.uk/publication/consultation/cp25-42.pdf
  • Establishes capital, liquidity, risk management, and wind-down planning requirements.
  • Treats crypto firms as financial institutions, not just tech platforms.
  • Builds on earlier stablecoin and custody proposals.

Strategic Shift

  • Moves UK crypto regulation from “edge compliance” (AML, promotions) to institutional regulation.
  • Emphasises disclosure, solvency, governance, and consumer protection.
  • Creates a roadmap for a responsible, resilient crypto ecosystem.

Implications for Management

  1. Licensing readiness: Firms must prepare for FSMA authorisation.
  2. Operational overhaul: Strengthen governance, compliance, and risk frameworks.
  3. Stakeholder engagement: Respond to consultations to influence final rules.
  4. Cultural shift: Embed transparency and resilience into business models.

Key Source Documents

UNITED KINGDOM CRYPTO CONSULTATION

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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.  

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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.