FCA launches consultation on the role of Consumer Duty in new crypto rules

The FCA is seeking further feedback on rules for crypto firms including oversight of international cryptoasset firms and the role of Consumer Duty.

The latest consultation paper follows proposals set out in December and also addresses how conduct standards, redress and safeguarding will apply to cryptoasset firms.

Published today (26 January), CP26/4 Application of FCA Handbook for Regulated Cryptoasset Activities II covers:

• Consumer Duty – how the Duty will apply to cryptoasset firms, supported by additional non-Handbook guidance, so firms deliver good outcomes for retail customers.
• Redress and Dispute Resolution (DISP) – the approach to complaints handling and redress, ensuring consumers have clear routes to resolve issues.
• Conduct of Business Standards (COBS) – applying key conduct rules to cryptoasset activities, so firms act fairly and transparently.
• Credit for crypto purchases – rules on using credit to buy cryptoassets, to reduce risks of harm from borrowing to invest.
• Training and competence – standards for staff knowledge and skills, so firms have competent people managing crypto services.
• Senior Managers and Certification Regime (SM&CR) – the approach to categorising cryptoasset firms under the Senior Managers and Certification Regime.
• Regulatory reporting (SUP 16) – requirements for firms to report data so the FCA can monitor risks and supervise effectively.
• Cryptoasset safeguarding – applying safeguarding rules to firms conducting multiple regulated cryptoasset activities, and the proposed approach to custody of specified investment cryptoassets.
• Retail collateral treatment in cryptoasset borrowing – how retail consumers’ collateral should be treated when they borrow cryptoassets, to protect their interests.
• Location policy guidance – clarifying expectations on where cryptoasset firms should be based, to ensure effective oversight.

The FCA said: “The Consumer Duty sets appropriate standards for crypto firms by ensuring they deliver good outcomes for customers while supporting them to navigate their financial lives.

“At the same time, risks remain, and we want a market where innovation can thrive, but where people understand the risks. But regulation can’t – and shouldn’t try – to get rid of all risk. We want those interested in investing in crypto to understand that risk.”

The regulator added: “People should remember crypto is currently largely unregulated – except for financial promotions and financial crime purposes.”

Firms have until 12 March 2026 to give feedback and the FCA is hosting a webinar on 29 January to help firms get ready for authorisation.

The gateway for firms wishing to apply for authorisation to undertake cryptoasset regulated activities opens in September 2026.