The UK Financial Conduct Authority has opened the final stage of consultations for cryptocurrency companies, seeking feedback on consumer responsibility rules before March 12, 2026. The move marks a key step toward tighter oversight of crypto activity in the country. The regulation establishes customer treatment standards that companies must follow while it brings digital currency regulations in line with existing financial regulations.
The regulatory body established that investors will still face dangers when they invest in cryptocurrencies despite the implementation of new regulations. The consultation forms part of a broader framework which the Treasury introduced in December 2025.
The FCA said the proposals aim to support an open and competitive crypto market that consumers can trust. The regulator stated that the Consumer Duty sets standards that require firms to deliver good outcomes for customers.
The FCA also said firms must help customers navigate financial decisions while understanding crypto risks. It added that regulation should not remove all risk from investing. So how far should regulation go in protecting consumers while still allowing crypto innovation to develop?
The consultation follows proposals issued in December on applying a similar regulatory approach to cryptoassets as traditional finance. Those proposals focused on clear consumer information and proportionate requirements for firms.
The FCA said the approach also allows flexibility to support innovation. It noted that firms and consumers should both understand the risks tied to crypto activities.
The FCA is seeking feedback on how consumer responsibilities should integrate into crypto asset companies. The consultation remains open until March 12, 2026, with full details available on the regulator’s website. The guidance applies to firms planning to undertake regulated cryptoasset activities under Treasury legislation from December 2025. It also applies to auditors, advisers, industry groups, and consumer organizations.
Under the proposals, firms must act in good faith and avoid foreseeable harm. They must also provide clear information and fair pricing to customers. In addition, crypto firms must meet standards on operational resilience, consumer duty, financial crime controls, and governance. These requirements mirror expectations placed on traditional financial firms.
Earlier this month, the FCA said companies offering crypto services must gain authorization under new rules effective October 2027. The requirement also applies to firms already registered under money laundering regulations.
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Firms registered under anti-money laundering or payment rules must seek full authorization. Firms already authorized under FSMA must vary their permissions to cover crypto activities. The FCA has already granted money laundering registration to Ripple, the developer and issuer of the XRP token.
Despite tighter oversight, the FCA confirmed it will not extend Financial Services Compensation Scheme protection to cryptoassets. The FSCS normally compensates customers when firms fail. Crypto investors will not receive compensation for investment losses if a crypto firm collapses. This applies even when losses arise from regulated crypto activities.
The FCA also noted potential inconsistencies in this approach. Claims involving shares held in custody will qualify for FSCS coverage. In contrast, claims involving tokens representing shares on blockchains will not receive protection. The regulator said these boundaries reflect the current structure of financial compensation rules as crypto regulation develops.
The FCA has opened its final consultation on crypto consumer duty rules, setting clearer conduct standards ahead of new authorization requirements. Feedback runs until March 12, 2026. Crypto firms must prepare for stronger oversight while consumers remain responsible for understanding investment risks.