The UK Financial Conduct Authority (FCA) has issued a report Discussion paper Outlining several proposals and inviting public comments on crypto regulations in the country. Notably, one of the proposals seeks to ban public cryptocurrency offerings from unregulated entities.
Cryptocurrency public offerings attract FCA attention
According to the Financial Conduct Authority (FCA), the proposals – detailed in a discussion paper titled “DP24/4” – aim to mitigate risks associated with digital assets while promoting growth and innovation within the sector. This paper is directed towards investors, cryptocurrency companies, industry groups and other professional bodies involved in the field of virtual assets.
One proposal receiving a lot of attention is a potential ban on public virtual asset offerings. The UK government’s Department for Economy and Finance, the Treasury, is seeking to ban most public cryptocurrency fundraising, with potential exceptions for entities already operating in the UK or those qualifying under specific exemptions.
The FCA’s move is consistent with broader efforts by regulators around the world to tighten controls on unregulated offerings, which have often been linked to fraud, investor losses and market manipulation.
The bill is expected to formalize the ban, signaling a notable regulatory shift. This development comes in the wake of the recent crackdown by the Financial Conduct Authority (FCA) on Solana-based platform Pump.fun, which was Forbidden From working in the United Kingdom due to her failure to obtain the necessary permission.
In addition to the proposed public offering ban, the FCA has also proposed that licensed digital asset trading platforms share market abuse data to identify and address suspicious activity. This initiative seeks to promote transparency and improve user safety in the cryptocurrency sector.
The discussion paper also invites comments on market acceptance, disclosure practices, and measures to address market abuse. The FCA has set a deadline of 14 March 2025 for stakeholders to provide their comments and input.
Other European countries have also called for global cooperation when it comes to regulating digital assets. For example, countries such as Denmark, Italy and the Netherlands are considering implementing tax control rules to better align with EU tax standards.
The UK’s Digital Assets Stand: Regulatory Overreach or Necessity?
This paper is part of a broader effort to define the regulatory regime for cryptocurrencies in the UK, and it is expected that additional papers will follow. It is worth noting that a draft law is expected to be drafted next year, and the full regulatory framework is scheduled to be implemented by 2026.
The timing of the discussion paper coincides with growing concerns about declining regulatory compliance among digital asset companies. Modern a report It revealed that nearly 90% of digital asset entities in the UK fail to meet anti-money laundering (AML) standards. Regulators are concerned that lax compliance could expose the financial system to illicit activities, including fraud and money laundering.
In October, the financial watchdog was urged to investigate short video hosting platform TikTok allegations To operate illegally as a cryptocurrency trading platform. These incidents confirm the increased vigilance of the regulatory body in protecting financial markets.
Despite regulatory challenges, adoption of virtual assets in the UK remains strong. According to the Financial Supervision Authority a reportNearly 7 million adults in the UK currently own digital assets.
While the FCA’s push for tighter regulation aims to protect market participants, it faces the challenge of avoiding excessive measures that might push digital asset companies to move to more crypto-friendly jurisdictions. For example, the United States witnessed Renewed optimism After the electoral victory of pro-cryptocurrency candidate Donald Trump. At press time, Bitcoin (BTC) is trading at $105,998, up 3.1% over the past 24 hours.
Featured image from Unsplash.com, chart from TradingView.com