FCA’s Discussion Paper starts to shape the UK’s Market Abuse Regime for Crypto Assets

Following confirmation from the government last month that it will introduce legislation to bring crypto assets into the FCA’s regulatory perimeter, the UK regulator has published a Discussion Paper (DP) that includes market abuse related considerations.

The roadmap indicates that a Consultation Paper covering Market Abuse, Admissions and Disclosures will be published in Q3 2025 with the FCA’s Crypto regime scheduled to go live in 2026.

It’s clear from the DP that the FCA will carefully consider the competitiveness of the UK crypto assets market but it’s also apparent that the proposed Market Abuse Regime for Crypto assets (MARC) intends to reduce the incidence of market abuse, lessen information asymmetries and reduce harm to consumers, thus increasing confidence and market growth.

The MARC framework approach intends to prevent, detect, and disrupt crypto asset market abuse and help prevent regulatory arbitrage by aligning with global standards, including the IOSCO CDA Recommendations covering Market Abuse, Surveillance and Material Non-Public Information.

New legislation is expected to require the disclosure of inside information in relation to crypto assets traded on a regulated Crypto Asset Trading Platform (CATP) as well as prohibit insider dealing, the unlawful disclosure of inside information and market manipulation.

Challenges

The existing market abuse regime cannot simply be transferred to crypto asset markets, given the highly fragmented and cross-border nature of these markets, issuers being less identifiable, the decentralised price formation processes and greater participation from retail consumers making the surveillance process more difficult.

However, the fact that the FCA acknowledges these key challenges, coupled with the questions being raised in the DP being so considered and broad, appears to be a positive development for the crypto assets sector and the proposed UK MARC regime.

Comments on the FCA’s DP must be submitted to the regulator by 14 March 2025.

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