What new cryptocurrency regulations mean for investors

Regulation of cryptocurrency investments are set to be toughened up in a move to boost protections for investors.

The Treasury has revealed that platforms where users buy and sell cryptocurrencies such as bitcoin will be “backed to innovate and grow” as the government seeks to make the UK a “global destination for digital assets”.

The Financial Conduct Authority (FCA) is consulting on new rules to be introduced from 2027. A spokesperson for the City watchdog said “our goal is to have a regime that protects consumers, supports innovation, and promotes trust”.

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Millions of people throughout the UK now own cryptocurrency, said ThisIsMoney, with numbers having “surged over the past year”.

How will new rules change how crypto is regulated?

Cryptocurrencies have become a popular alternative investment in recent years, helped by the bitcoin price hitting record highs.

Currently, crypto platforms have to register with the FCA only for money-laundering prevention purposes but the new rules will mean companies are “regulated in the same way as other financial products”, said The Guardian.

This creates a “shift from the current system”, said CoinCentral, and aligns the UK approach “more closely” with the US, while the EU has totally separate rules specifically for crypto.

The FCA said its changes could include new rules on what firms must tell investors “so people have the facts before they invest”, as well as new standards for exchanges to “keep trading safe and reliable”.

Some plans from earlier this year have been “diluted”, said the Financial Times. The regulator will no longer ban trading platforms from offering their own tokens, for example.

How will crypto regulation protect consumers?

Regulation could mean crypto firms are held to account more effectively, “so if you lose your money to a scam then you should be able to get help”, said The Sun.

New rules should also “make it easier for the government to find and address suspicious activity”, said ThisIsMoney.

Regulators will also be able to “impose sanctions or hold firms to account”, said The Independent.

But some areas of the new rules “remain undecided”, added the Financial Times.

The FCA said it would consult early in 2026 regarding whether the market should be covered by its consumer duty rules. These rules require regulated firms to ensure clients receive a good outcome.

Is cryptocurrency a safe investment?

More rules may be coming, but regulators continue to warn about the risks of cryptocurrency investing, said Reuters, especially that investors “should be prepared to lose all of their money”.

Commentators are describing the regulatory shift as a “watershed moment”, with David Heffron, expert in financial services regulation at Pinsent Masons, explaining it would help in “building trust and giving firms certainty”.

The consultation ends in February 2026 and the changes mean it will “likely only get easier” to invest in crypto, said MoneyToTheMasses. But crypto is still a “fundamentally risky investment” and will not be fully regulated in the UK until 2027.