The Financial Conduct Authority (FCA), the UK’s regulatory body for financial services, has announced its plans to establish a market abuse regime for the cryptocurrency sector within the year. This initiative is part of the FCA’s broader strategy for 2024-2025, focusing on consumer protection, maintaining market integrity, and promoting international competitiveness.
Expanding Regulatory Framework
In 2023, the UK government sought feedback on enhancing the crypto regulatory landscape, including the introduction of a market abuse regime. The proposal targets any entity engaged in market abuses with crypto assets traded on UK exchanges, irrespective of their geographical location.
Key Features of the Proposed Regime
The planned regime aims to mitigate market manipulation and abuse by enforcing strict regulations on crypto trading activities. It will mandate crypto exchanges to implement measures for identifying and preventing market abuse.
The FCA also disclosed its financial strategy, outlining the recovery of costs associated with the regulation of stablecoins and the expansion of the financial promotions perimeter. The authority estimates a recovery of £6.2 million for the new regulations and an additional £200,000 for extending financial promotions regulations.
A Step Towards Enhanced Crypto Regulation
The FCA’s move reflects the UK’s commitment to creating a secure and competitive crypto market environment. By introducing a market abuse regime, the UK aims to align crypto asset trading practices with established financial market standards, thus fostering a transparent and abuse-free marketplace.
