FCA launches final consultation on UK crypto rules: custody, consumer protections, credit limits and reporting

The UK Financial Conduct Authority (FCA) opened a final consultation on February 12, 2025, seeking industry and public feedback by March 12, 2025, on ten proposed rules that would form a comprehensive UK crypto regulatory framework. Key proposals address business conduct and consumer protection—transparent pricing, clearer risk disclosures, marketing rules, and potential bans or limits on buying crypto with credit—and stronger custody and client asset safeguards including segregation, cold storage, multisignature, independent audits and insurance. The package also mandates enhanced reporting and transparency via standardized templates for transaction volumes, client demographics and risk exposures, plus new regulatory reporting obligations for crypto asset service providers (CASPs). The FCA plans to review responses in April, publish final rules in Q2 2025, seek parliamentary approval and move to implementation likely in late 2025 or early 2026; applications for CASP licences are expected thereafter. Industry response is cautiously positive: exchanges welcome clarity but warn of higher compliance costs; consumer groups support credit restrictions. Expected market effects include consolidation among smaller firms, higher compliance costs, improved consumer confidence, and greater institutional participation. Traders should watch deadlines and timelines (consultation close: 12 March 2025), potential limits on credit purchases of crypto, and stricter custody standards that may raise operational costs for smaller platforms and reduce liquidity or listings in the short term while boosting long-term market integrity and institutional inflows.