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The FCA’s Business Plan and Crypto

Author: Syedur Rahman  20 March 2024

Syed Rahman assesses the measures affecting crypto in the Financial Conduct Authority’s 2024-25 business plan.

The UK’s Financial Conduct Authority (FCA) has published its business plan for 2024-25, outlining its priorities.

These priorities include some rather obvious aims such as reducing and preventing financial crime, putting consumers’ needs first, strengthening the UK’s position in global wholesale markets, slowing the growth of investment fraud and furthering the aims of its Economic Crime Plan and Fraud Strategy; both of which were published last year.

But more specifically, the FCA’s 2024-25 plan includes a commitment to introducing a market abuse regime for crypto assets. This, when introduced in the next 12 months, will apply to anyone committing market abuse involving a crypto asset that is admitted to trading on a UK trading venue - including individuals and entities that are not based in the UK.

Crypto exchanges will be expected to detect and disrupt market abuse behaviour, such as insider trading and market manipulation. The FCA states in its business plan that it intends to recover £6.2 million of costs for the “new regulation of stablecoins and wider regime,” and £200,000 for “extending the financial promotions perimeter.”

 

Intervention

The 2024-25 plan has been published in the wake of increased FCA intervention regarding illegal crypto asset promotions targeting UK consumers, with it cracking down on more than 10,000 adverts (and issuing 450 alerts for illegal adverts) last year.

Although the FCA is currently the main crypto regulator in the UK, the new authorisation regime would require crypto financial service providers to be registered under the Financial Services and Markets Act (FSMA) or the Payment Services Regulations 2017. Companies that issue NFTs may, however, still need to register with the FCA.

The FCA plan places an emphasis on delivering a proportionate market abuse regime for crypto assets and on continued supervision of cryptoasset firms’ financial promotions. It also sets the goal of improving the FCA’s technological capabilities when it comes to detecting harmful financial promotions. It intends to further develop its InvestSmart campaign to help make would-be investors more aware of the risks, including those related to crypto assets.

The FCA’s focus on crypto will see it work on advanced analytic capabilities in order to improve its market monitoring capabilities, while developing its framework in a way that supports innovation, lowers industry costs and, in turn, promotes the UK’s position in global wholesale markets.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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