UK Financial Regulat...

UK Financial Regulator Seeks Crypto Industry Input on New Rules to Curb High-Risk Trading

By José Oramas December 09, 2025 In Cryptocurrency Law, UK FCA, United Kingdom

FCA - Financial Conduct Authority acronym on notepad, Business concept background — Source:AdobeStock

The UK’s Financial Conduct Authority (FCA) is seeking feedback from crypto firms to help develop new rules intended to broaden access to investments while increasing protection for high-risk products.
The proposals aim to change how firms classify clients, manage conflicts of interest, and use digital engagement tools, particularly concerning retail access to investment products.
The FCA clarified that experience trading speculative products, including crypto, should not automatically qualify a client as “sophisticated,” stressing that firms must ensure clients understand and can bear potential losses.

The UK Financial Conduct Authority (FCA) is asking crypto firms to help shape a new set of rules intended to change how retail investors access and are classified for investment products.

In a package of discussion and consultation papers, the regulator set out plans to widen access to investments while tightening protections around high-risk products. It is essentially seeking feedback on proposed changes to client categorisation rules, conflict-of-interest requirements and how firms use digital engagement tools to promote trading.

The news comes a few days after the UK formally recognised crypto as property, thanks to the Property (Digital Assets etc) Act 2025, which intends to give clear ownership rights to digital asset holders.

The UK is also tightening its tax scrutiny. The HM Revenue & Customs will start collecting data from exchanges starting 2026.

FCA Looking For Guidance

Moreover, the FCA said poor outcomes on some “high-engagement” trading apps are largely driven by activity in cryptoassets and leveraged derivatives such as contracts for difference (CFD). It also flagged risks from “cryptoasset proxies” that can be traded without limits, warnings or tests of whether they are appropriate for a given customer.

One proposal clarifies that experience in speculative or leveraged products, including crypto, should not on its own be treated as evidence that a client is sophisticated. The draft guidance says a trading history “mainly in speculative high risk or leveraged products or crypto assets is not usually an indicator of professional capability”, unless other factors show the client can understand and bear potential losses.

Virtually all of the underperformance on high DEP apps could be attributed to trading in cryptoassets and CFDs, which in the sample of firms, were only available on high DEP apps

Financial Conduct Authority.

The regulator frames the shift as a move away from box-ticking tests and toward greater responsibility on firms to classify and protect clients correctly. Companies that advise on or sell digital assets have been asked to respond to the proposals in the coming months.