FCA consults on market abuse regime for cryptoassets

CP25/41: Regulating cryptoassets: Market abuse regime for cryptoassets

The FCA’s Consultation Paper 25/41 (CP 25/41) outlines detailed proposals regarding Admissions & disclosures and market abuse regime for cryptoassets (MARC). Drawing on insights from the draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (the Cryptoasset Regulations) and industry responses to DP 24/4, the FCA intends to introduce a proportionate and flexible framework that addresses the distinct risks posed by cryptoassets.

Below, we look at the FCA’s key proposals in MARC and what they could mean for market participants.

Inside information disclosure responsibilities

Nature of inside information:

The FCA proposes to provide guidance to help firms determine when information is considered public (for example, if it is posted on a website or social media) and when information about pending orders may qualify as inside information.

Requirement to disclose inside information:

Issuers, offerors, and Cryptoasset Trading Platforms (CATPs) must publicly disclose inside information that directly concerns them. The Cryptoasset Regulations broaden disclosure responsibilities beyond just issuers, reflecting the unique structure of cryptoasset markets. Guidance will clarify what types of information may require disclosure.

Non-exhaustive list of inside information:

The FCA will provide a non-exhaustive list of examples of inside information, such as details about asset admission or cancellation, stablecoin viability, or undisclosed code vulnerabilities, to help clarify disclosure obligations and reduce information gaps. However, issuers, offerors, and CATPs must always assess whether any information they hold qualifies as inside information.

Delayed disclosure of inside information:

Inside information must generally be disclosed as soon as possible, but disclosure can be delayed if immediate publication would harm legitimate interests, provided the delay does not mislead the public and confidentiality is maintained. Anyone delaying disclosure must keep a record of the information and the reasons for the delay, and provide this to the FCA if requested. Guidance includes examples of when a delay may be justified.

The method of disseminating inside information

The FCA recognises that inside information in cryptoasset markets is often shared informally across various channels, making it hard for consumers to access. In DP24/4, the FCA proposed three models for dissemination, with most respondents favouring publication on the firm’s website and active sharing via other channels (e.g., social media), as this is efficient, cost-effective, and aligns with international practice. The FCA now proposes that, at the outset, inside information must be published on the issuer’s, offeror’s, or CATP’s website and actively disseminated, then uploaded to the FCA’s NSM as soon as possible. In the future, more formal dissemination channels may be considered as the market matures.

Legitimate market practices

Certain behaviours, such as market soundings and accepted market practices, are exempt from market abuse rules under UK MAR if carried out appropriately. The FCA intends to introduce similar exemptions for cryptoassets, providing clear guidance on legitimate market practices to support market stability and efficiency, while minimising the risk of abuse.

The FCA proposes the following legitimate market practices:

Coin burning and crypto-stabilisation:

• Coin burning: Removing cryptoassets from circulation to reduce supply and potentially increase value, similar to share buy-backs in traditional finance. To qualify as a legitimate market practice, coin burning must aim solely to reduce supply, be fully documented, and disclosed to the public (unless observable on the blockchain).
• Crypto-stabilisation: Actions to support a cryptoasset’s price and reduce volatility, typically around initial or secondary offerings. This can qualify as an LMP if done for a limited time and transactions are recorded and disclosed (unless observable on the blockchain).

Legitimate reasons:

• Firms will not be considered to have engaged in market manipulation if their actions are for legitimate reasons, as set out in FCA guidance.
• Behaviour is not legitimate if intended to induce trading, move prices, or create a false or misleading impression.
• Normal trading for investment, risk management, or profit, in itself, is unlikely to be considered market manipulation.

Market abuse systems and controls

CATPs and intermediaries are required to implement effective and proportionate systems to prevent, detect, and disrupt market abuse. These systems should be adapted from the UK Market Abuse Regulation (MAR) framework, with adjustments to address the specific risks associated with cryptoassets.

Key expectations include, for example:

• Surveillance of trading activity: Firms must monitor trading to identify and assess suspicious orders or transactions.
• Reporting and escalation: Intermediaries are required to promptly notify CATPs of any suspected market abuse. CATPs, in turn, must take appropriate action in response. The FCA should only be notified if both the intermediary and the CATP are unable to adequately prevent, disrupt, or deter the abuse.
• Employee training and information barriers: Firms should ensure staff are properly trained to recognise and respond to market abuse risks, and must implement measures to prevent the inappropriate flow of sensitive information.
• Record-keeping and platform-specific rules: Comprehensive records must be maintained, and CATPs should establish rules tailored to their platforms, including facilitating cross-platform information sharing where appropriate.

CATPs and intermediaries may outsource monitoring functions to third parties or group entities, but must comply with SYSC 8 and remain fully responsible for ensuring clear documentation, defined responsibilities, and a specified duration for the arrangement.

If a firm is unable to manage market abuse risks effectively, it should inform the FCA. However, unlike in traditional finance, the FCA will not centrally assess suspicious transaction reports for cryptoassets.

On-chain monitoring

In cryptoasset markets, trading occurs both on the blockchain (on-chain) and outside it (off-chain). Market abuse, such as wash trading, pump-and-dump schemes, and insider dealing, can take place directly on-chain, where traditional monitoring tools may not detect it.

To address this, the FCA initially proposed in DP 24/4 that all CATPs and intermediaries should have on-chain monitoring capabilities. However, recognising the need for proportionality, the FCA now requires only large CATPs (with annual average revenue of £10 million or more) to conduct on-chain monitoring relevant to their operations. Smaller CATPs and intermediaries are only required to maintain off-chain monitoring, though they are encouraged to adopt on-chain monitoring where possible. Large CATPs should use suitable tools and integrate on-chain and off-chain surveillance to effectively detect and prevent market abuse.

Cross-platform information sharing

The FCA proposed in DP 24/4 that all CATPs should share information with each other to help prevent, detect and disrupt market abuse.

Similar to on-chain monitoring, and recognising the need for proportionality, the FCA now proposes that only large CATPs (with annual average revenue of £10 million or more) must share information with other large CATPs when they suspect market abuse and disclosure is necessary to detect, prevent, or disrupt it. This approach is industry-led, allowing for flexible adoption of RegTech solutions and best practices as technology evolves. Information sharing must be timely, relevant, proportionate, and secure, but the FCA will not mandate specific formats or methods. To support cooperation, a safe harbour will protect CATPs from civil liability when sharing information in good faith, though this does not extend to data protection breaches. Shared information must only be used to counter market abuse, and CATPs are required to keep records of all shared or withheld information for five years.

Insider Lists

DP24/4 respondents strongly supported requiring insider lists to track access to inside information, noting their importance for market integrity and compliance. While some raised concerns about the burden for smaller or decentralised firms, most agreed the benefits outweigh the costs. The FCA proposes that issuers, offerors, and CATPs must maintain accurate, up-to-date insider lists, including details like identity, reason for inclusion, and wallet addresses, using templates based on traditional finance rules.

What this means

These proposals will raise market conduct standards for UK cryptoasset firms. Issuers, offerors, and CATPs will face stricter requirements around disclosure, systems and controls, and monitoring for market abuse. Notably, large CATPs will be required to implement on-chain monitoring – a new obligation not found in traditional finance.

All firms should prepare to review and update their compliance frameworks, and firms that are likely to qualify as large CATPs should brace themselves for more stringent compliance requirements and enhanced monitoring obligations.

Next steps

The FCA is inviting feedback on these proposals until 12 February 2026.