The UK Financial Conduct Authority (FCA) has initiated a public consultation to refine its crypto regulations, which began on December 16, 2024.

Key challenges identified in the paper include market abuse, financial fraud, and the necessity for clearer disclosures to enhance consumer trust.

The FCA plans to enforce rigorous checks on the teams behind crypto projects to improve their trustworthiness.

A recent report highlighted that the UK accounts for 7% of global crypto-related scams from January 2022 to October 2024, underscoring the urgency for stringent regulations.

Since 2020, the FCA has been monitoring compliance with anti-money laundering laws in the crypto sector and has issued over 1,000 warnings to crypto firms.

Final regulations are expected to be rolled out by 2026, which could enhance market safety but may also reduce investment options for consumers due to increased compliance costs.

This regulatory action is part of a global trend to impose stricter controls on unregulated crypto offerings, often linked to scams and market manipulation.

This consultation period will last until March 14, 2025, and seeks feedback from firms, legal experts, and industry stakeholders.

The FCA's discussion paper proposes a ban on non-regulated entities from conducting public crypto offerings, aiming to enhance consumer protection.

This initiative is designed to create a balanced regulatory framework that encourages innovation while addressing risks such as market abuse and fraud.

Under the proposed rules, public offerings of crypto assets will only be allowed on regulated trading platforms to mitigate the risk of fraudulent coins.

While public offerings of certain cryptocurrencies may be restricted, compliant platforms will have specific exemptions.