As the FCA’s proposed rules take shape, understanding the path to UK crypto compliance in 2025 is essential for any regulated service provider.

Key takeaways

• The UK financial services regulator’s Crypto Roadmap is well underway, with two discussion papers already concluded and three consultations currently live.
• We are heading for the mid-point of the roughly 18-month period when the rules are up for discussion.
• Currently open discussion material (DP25/5) provides the bulk of proposals around core cryptoasset service provider business models, notably trading.
• Two newly published consultation papers (CP25/14 & CP25/15) cover operationally key elements – custody and prudential requirements.
• Forewarned is forearmed: now is the time to begin mapping likely requirements and start thinking future strategy.

Setting the direction of regulated crypto activity in the UK

If HM Treasury’s recent Statutory Instrument is the ‘what’ of UK crypto regulation, the UK’s Financial Conduct Authority (FCA) is in charge of the ‘how’.

Since the end of last year, the FCA has published a flurry of documentation detailing how it proposes to apply rules to the UK cryptoasset market. And with secondary legislation now drafted and published by HM Treasury (see our plain English guide here), the scene is formally set for those rules to be developed and implemented in practice.

This moment sets the stage for a pivotal shift in UK crypto compliance in 2025.

It also means now is a great chance to stop and reflect on what we know so far about the first batch of proposed UK rule-making and what it might hold in store for future UK regulated crypto businesses.

This first digest covers the FCA’s overall Cryptoasset Roadmap, discussion paper DP24/4 (information disclosures and market abuse) and discussion paper DP25/1 (on regulating crypto trading platforms, intermediaries and other cryptoasset activities) from a high-level need to know view.

The FCA’s Crypto Roadmap – a 2025/26 game plan

In late 2024, the FCA laid out a Cryptoasset Regulatory Roadmap mapping the journey to a fully regulated UK crypto sector over the years to come.

Key milestones include: extending existing market rules to crypto (e.g. rules on investor disclosures and market abuse); setting new conduct standards for crypto businesses (e.g. how exchanges must operate, and how customer assets are safeguarded); and phasing in prudential rules (capital and liquidity requirements) for crypto firms. The roadmap is essentially a public timeline of policy work, with Discussion Papers (DP) to present first ideas and intentions, Consultation Papers (CP) to discuss proposals in more detail, and Policy Statements (PS) to communicate finalised rules. The objective is to complete rules by the middle of next year, ahead of the ‘gateway’ opening for firms to get authorised under the new regime. This means we are in the roughly 18-month period when the rules are up for discussion and there is the opportunity for stakeholders to influence how the rules take shape.

DP24/4 – Admissions, disclosures and market abuse

The first major discussion paper under the current Government came at the end of 2024 with the market integrity focused DP24/4. The focus of these cross-cutting proposals, which will get separate legislative treatment from the specific future regulated cryptoasset activities, is twofold. First, it examines how crypto tokens get listed on trading venues and what information must be disclosed to investors to do so. And second, it presents a Market Abuse Regime for Cryptoassets (MARC) – measures designed to prevent insider trading, market manipulation and other unfair practices in crypto markets.

This means crypto exchanges must vet tokens before listing (similar to stock exchanges reviewing new listings) and requires issuers to publish certain disclosures. It also means extending rules against things like insider dealing and market manipulation to cover crypto trading platforms and token issuers – so the FCA can hold market actors to account for shady behaviour, just as they would in traditional markets.

In the big picture, DP24/4 is about ensuring that, when you trade crypto in the UK, you have reliable information and are protected from hidden dangers as much as possible. The paper closed for feedback in March 2025 and we expect the FCA to use that input to draft formal rules. Fair and orderly markets are in everyone’s interest, and we’ve contributed our thoughts to help strike the right balance between protection and innovation.

Under current proposals, there are 17 new processes for firms to consider and implement in this area of the proposed future framework. Some elements of this – preparation of asset disclosure documents, ongoing inside information disclosures, suspicious transaction and order reporting (STOR) and cross-platform information sharing in particular – represent significant, cross-industry undertakings in their own right.

These changes lay the groundwork for transparent, enforceable UK crypto compliance through 2025 and the years ahead.

DP25/1 – trading, brokerage, staking and other cryptoasset service lines 

FCA published DP25/1 in May 2025. This discussion paper is a wide-ranging paper that seeks views on how to regulate core activities of the crypto sector, including: crypto trading platforms (what the FCA calls CATPs), crypto intermediaries (brokers, dealers and market makers), crypto lending and borrowing services, and staking. It also explores where decentralised finance (DeFi) boundaries are drawn and asks whether buying crypto on credit cards should be restricted. In short, DP25/1 is painting the broad canvas of what day-to-day crypto business regulation might look like.

Here are some notable proposals and questions from DP25/1:

• Crypto trading platforms (exchanges): the FCA suggests applying principles from traditional trading venues. Expect rules on fair trading, transparency, and a push towards UK location and authorisation requirements. Particularly, the regulator wants to ensure that UK consumers are served by UK authorised firms and has set out how it believes this could be applied to overseas firms through UK subsidiary and branch models. Exchanges will need to compartmentalise trading activities, treat orders impartially and commit to trade transparency measures. Bottom line: operating a crypto exchange in the UK will feel more like running a regulated trading venue, with heavy accountability for market integrity.

• Intermediaries (brokers/dealers): the mantra is ‘same risk, same regulatory outcome’ and the FCA wants brokers and market intermediaries to follow similar conduct rules as in mainstream finance. This could include best execution obligations (getting clients the best possible price, potentially checking multiple platforms); managing conflicts of interest (e.g. Chinese walls between any proprietary trading and client business), and no ‘payment for order flow’ kickbacks for routing orders to specific counterparties. Consumer Duty rules will also apply, with the wider aim of professionalising the crypto brokering experience.

• Lending and borrowing: in a significant move, the FCA proposes banning crypto lending products for retail customers outright. Past collapses of crypto lenders have clearly made the regulator wary. The idea is that the volatility of crypto, coupled with the opacity of fund handling and lack of legal security, makes crypto borrow/lend models unsuitable for retail investors. This would be a tough pill for some business models but reflects a caution-first approach to consumer protection. The FCA is essentially saying: let’s not allow products that have caused massive losses elsewhere. For sophisticated players or institutional lending, rules are likely to be different, but retail would be ring-fenced from this particular risk.

• Staking: given the technical complexity, the FCA worries that consumers may not understand what staking entails and the risks involved. Thus, they suggest safeguards such as requiring explicit customer consent to key terms before a firm can stake their cryptoassets. That means if an exchange or wallet offers to stake your assets (to earn rewards from network validation), they must be very clear and get your agreement on things like lock-up periods and slashing risks. Notably, the regulator suggests staking service providers should be on the hook if funds are lost, and they will need to set capital aside to cover this. In a nod to wider custody requirements, cryptoassets delegated for staking will also require strict segregation. 

• Use of credit to buy crypto: noticing that more people have been buying crypto on credit (e.g. credit cards, loans), the FCA is considering whether to restrict or ban credit-funded crypto purchases. The concern is that buying speculative assets on credit can lead to outsized losses (borrowing money to gamble, essentially). One nuance: the regulator has floated the idea of exempting ‘qualifying stablecoins’ from such a ban – perhaps recognising that if a stablecoin is truly stable and used like digital cash, buying it on credit isn’t the same as taking a cash advance to buy a speculative token. 

• Decentralised Finance (DeFi): As laid down in the draft Statutory Instrument, the FCA will exempt DeFi protocols from authorisation where they operate on a ‘truly decentralised’ basis. Nevertheless, the FCA has stated its position that, if it can identify a controlling person or entity that offers a regulated activity, it will want to regulate it. Identifying what is a sufficiently controlling party is going to be an extremely grey area that will need examining on a case-by-case basis. Given public statements around UK-US crypto cooperation, policymakers might look to the US, where this debate has run for some time. On one hand, developing non-custodial software should not make one a financial services intermediary, and this must be fiercely safeguarded if we want to avoid a chilling effect on crypto tech development worldwide. On the other hand, bad actors have used ‘DeFi’ clothing to control user funds and perform activities that look extremely akin to centralised business operations. In these cases, it makes sense that equivalent activity means equivalent regulation.  

As we can see, the FCA is covering a lot of ground with current proposals. Importantly, these are discussion points, not final rules. The tone of DP25/1 is collaborative – the FCA is seeking views and openly asking if it is striking the correct balance or if alternative measures can achieve the same outcomes. This is encouraging: it means if you operate or use crypto services, now is the time to voice any concerns or suggestions so the final rules are fit for purpose.

Stablecoins and the next steps in UK crypto compliance

You might be wondering, what about stablecoins and custody rules specifically? The FCA hasn’t forgotten – in fact, they addressed these in an earlier discussion phase (DP23/4 in 2023) and they will be coming back around as formal consultation proposals soon. Hot off the press, the regulator has published both consultations, and is receiving feedback until the end of July 2025.

CP25/14 on stablecoin issuance and custody outlines how firms issuing qualifying stablecoins must, for instance, safeguard reserves or ensure redeemability, as well as the rules for custodians holding crypto on behalf of clients. Running in parallel, CP25/15 covers the prudential regime (capital and liquidity) for crypto firms – essentially how much financial buffer and risk management systems firms must have to operate safely. 

By Q3 2025, a third consultation will look at overarching conduct standards and governance (e.g. applying the Senior Managers & Certification Regime to crypto firms, complaints handling, and how the general Conduct of Business rules will apply). All this will culminate in a comprehensive rulebook. The FCA expects to finalise rules in Q2 2026, with ‘go-live’ of the new licensing regime at an undefined later point, likely late 2026 or 2027.

Preparing your business for UK crypto compliance in 2025

With regulatory compliance, forewarned is forearmed. With the scale of upcoming UK regulatory change, now is the time to begin mapping likely requirements and start thinking future strategy.

As discussions progress through the year, we’ll see how proposals convert into specific implementation, and the solutions and processes cryptoasset service providers will need to add to their armoury.

At Zumo, we continue to build out the enabling solutions that are localised to the unique and developing needs of the UK market. And we’ll be working hard to make sure that, even as the landscape changes, businesses worldwide continue to have quality, efficient access to UK-compliant crypto solutions and UK consumers.

To discuss any of the topics raised in this briefing, please reach out to a member of the Zumo team.