FCA Seeks Crypto Industry Input for UK Investment Culture Overhaul
The United Kingdom’s primary financial regulator, the Financial Conduct Authority (FCA), has issued new proposals as part of an initiative to enhance the nation’s investment culture. It is now actively requesting feedback from participants within the cryptocurrency sector.
Through a set of documents released Monday, the FCA is asking crypto businesses to comment on suggested reforms. These reforms focus on expanding consumer access to investments and modifying regulations around how clients are categorized and how conflicts of interest are managed.
The accompanying discussion paper highlighted data showing that underperformance on digital trading platforms was largely attributable to activity in cryptoassets and leveraged derivatives. It raised specific alarms about products mimicking crypto exposure that operate without essential safeguards for retail investors.
Notably, the consultation includes a proposal to formalize guidance stating that a history of personal investment concentrated in speculative assets, including cryptoassets, is generally insufficient to classify an individual as a professional investor without additional compelling evidence.
According to the FCA, the suggested changes are meant to streamline current regulatory guidelines. This effort forms part of a wider objective to remove what it views as arbitrary tests and place more onus on firms to ensure correct client categorization.
Firms involved in advising on or distributing digital assets have been given until February and March to provide their formal responses to these regulatory proposals.
