Article

UK future crypto framework: FCA DP on admissions & disclosure and market abuse regimes

Published Date
Dec 17 2024
Yesterday the FCA published its discussion paper (DP) ‘Regulating cryptoassets: Admissions & Disclosures and Market Abuse Regime for Cryptoassets’, marking another step forward in the development of the UK’s regulatory framework for crypto.  In view of the level of industry engagement in crypto regulation to date, we anticipate firms and service providers operating in this space to take a keen interest in the FCA’s preliminary thoughts as set out in the DP.

For Admissions & Disclosures (A&D), the DP covers key topics on the processes, disclosures, liability, due diligence and use of the National Storage Mechanism (NSM). The regime will form part of the other pre-trade regimes for crypto such as the travel rule, the financial promotion regime and ESG disclosures. The FCA’s starting point is the new public offers and admissions to trading regulations regime (POATRs) (which is currently under consultation), tailored for the purposes of unique crypto features such as the role (or lack) of issuers and the operations of cryptoasset trading platforms.

For the Market Abuse Regime (MARC), the DP covers systems and controls, information sharing and disclosure of inside information. Here, the FCA’s starting point is the pre-existing market abuse regime and the proposals seek to transfer, conceptually, the key requirements to the crypto environment. On the question of how to maximise market surveillance by enabling cross-platform information sharing, the FCA confirms that it does not intend, currently, to establish an FCA-operated mechanism but expects an industry-led sharing mechanism (which operates on a private-to-private basis) would be better, and would allow flexibility.

In terms of general approach, the DP has been informed by the feedback from market participants who participated in various roundtables over the last year, and international work done in this space, including the IOSCO Crypto and Digital Assets (CDA) Recommendations. The deadline for comments is March 14, 2025.

The FCA is aiming to publish a follow-up consultation paper in Q3 2025, and - as a parallel workstream – in H1 2025 we are also expecting a discussion paper on trading platforms, intermediation, lending and staking, and prudential considerations (with a consultation paper to follow in Q4 2025 or Q1 2026). In the meantime, further information relevant to this DP can be found via the links below:

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