The new era of crypto regulation in the UK: FCA opens historic consultations on trading, lending, and DeFi rules

December 15, 2025, the UK Treasury officially announced a new regulatory framework for crypto assets, planning full implementation by 2027, marking a decisive step for this established financial center into the digital asset space.

The day after the policy announcement, the UK Financial Conduct Authority (FCA), responsible for specific enforcement, quickly acted by releasing a series of consultation documents titled CP25/40, CP25/41, and CP25/42, which broadly solicit opinions on future rules for cryptocurrency exchanges, intermediaries, lending, staking, and decentralized finance.

David Geale, head of FCA’s Payments and Digital Assets Department, stated that the goal is to establish a regulatory system that protects consumers, supports innovation, and enhances trust.

01 Regulatory Blueprint: From Partial Control to Comprehensive Oversight

UK regulation of crypto assets has not been achieved overnight. Previously, FCA’s authority was mainly limited to supervising promotional activities and ensuring compliance with anti-money laundering standards.

This limited oversight failed to address core risks such as market abuse, consumer protection, and platform operations.

A turning point occurred in December 2025 when the UK government enacted the “Financial Services and Markets Act (Crypto Assets) Regulations 2025,” formally bringing a range of new crypto activities under FCA regulation.

This means crypto assets will be regulated similarly to traditional financial products like stocks. Relevant companies will need to undergo FCA’s unified supervision and adhere to established transparency standards.

UK Chancellor Rachel Reeves pointed out that this is a key step in consolidating the UK’s position as a leading global financial center in the digital age. It can keep bad actors out of the market while providing clear guidance for corporate innovation.

02 Core Proposals: Reshaping Rules for Trading, Lending, and DeFi

The consultation documents released by FCA form a comprehensive package aimed at building a solid yet flexible regulatory foundation for the crypto industry. Among them, CP25/40 focuses on rules for regulated crypto activities and is central to understanding future regulatory directions.

The core of this consultation covers key aspects of the crypto ecosystem:

• Crypto Asset Trading Platforms: Establish clear operational standards to ensure fair and transparent trading.
• Intermediaries and Brokers: Include rules for crypto lending activities to better protect both lenders and borrowers.
• Staking Services: Clarify risks associated with crypto staking, with some complex models requiring registration.
• Decentralized Finance (DeFi): Address the unique structure of DeFi, with FCA seeking to develop tailored compliance solutions, possibly based on activity rather than entity.

Simultaneously, the CP25/41 document focuses on market access, information disclosure, and combating market abuse. Its goal is to strengthen safeguards by improving the quality and reliability of information at listing and to enhance market integrity by cracking down on fraud, insider trading, and market manipulation.

FCA’s research shows that the proportion of UK adults holding cryptocurrencies dropped from 12% to 8% over the past year. This data perhaps underscores the urgency of establishing a trustworthy regulatory environment amid market volatility and risk events.

03 Industry Impact: Transparency, Compliance, and Global Competition

The new regulations will profoundly change the landscape of the UK and global crypto industries across multiple levels. The primary goal is to build market confidence. Incorporating crypto assets into a regulatory framework similar to traditional finance aims to provide strong consumer protections and exclude illicit actors from the UK market.

For businesses, the rules offer much-needed legal clarity. Vugar Usi Zade, COO of Bitget Exchange, commented that many companies hesitated to enter the UK market previously due to uncertainty about which activities required authorization. The new regulations provide a clear definition of “qualified crypto assets,” helping companies understand whether their trading, custody, staking, or lending activities need FCA approval.

Another key point is the broad territorial scope. Overseas crypto platforms serving UK retail clients will also need FCA authorization, effectively placing the UK retail market under a unified protective umbrella.

The UK is collaborating with the US through a transatlantic working group to promote innovation in the crypto space. This indicates that the UK chooses to align its regulation with US standards rather than those of the EU, aiming to play a unique bridging role in the global regulatory landscape.

04 Key Points of the New Regulations and Future Timeline

To clearly illustrate the core of upcoming regulatory changes, the following table summarizes the key elements and implementation path of the UK’s new crypto regulatory framework:

According to the published roadmap, the consultation period for these proposals will end on February 12, 2026. FCA has committed to finalizing the entire regulatory system by the end of 2026, paving the way for its formal implementation in October 2027.

05 Adapting to the New Regulations: Recommendations for Exchanges and Users

In the face of upcoming regulatory changes, both crypto enterprises and ordinary users need to prepare in advance. For global trading platforms like Gate, proactively analyzing the territorial scope clauses of the new regulations is crucial.

It is necessary to assess whether services provided to UK users constitute “regulated activities” requiring FCA authorization. Even if headquartered overseas, actively serving UK retail clients may still require seeking approval.

Companies should begin reviewing their compliance status across trading, custody, lending, staking, and other business lines, conducting gap analyses against the new proposals. Particular attention should be paid to requirements around client asset segregation, risk disclosure, market monitoring, and anti-fraud measures.

For DeFi projects, although final rules are still being refined, the direction is clear: regulation will attempt to reach activities with substantive financial functions. Project teams should focus on the “activity-based” regulatory approach and evaluate whether their protocols might fall within the scope of regulation.

For users, increased regulation means higher security. In the future, when choosing trading platforms, priority should be given to those that openly commit to and actively pursue full compliance. Pay attention to whether platforms clearly disclose risks, their regulatory status in their headquarters’ jurisdiction, and whether they have a clear compliance strategy for the UK market.

Future Outlook

According to FCA’s research, although the proportion of UK crypto holders decreased over the past year, regulatory clarity is reshaping market expectations. Dante Disparte, Chief Strategy Officer at Circle, commented that by providing regulatory clarity, the UK is positioning itself as a “safe haven for responsible innovation.”

2027 is not out of reach. From now until the consultation period ending in February 2026, industry participants have a final critical window to shape the rules. FCA has explicitly stated that the final system will fully consider the feedback received during this period.