FCA to Ban Credit and Loans for Retail Crypto Purchases

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FCA Eyes Ban on Credit and Loans for Retail Crypto Purchases

Written by Aaron S.,

Editor-In-Chief

Last Updated: May 02, 2025

Key Takeaways

The FCA plans to ban retail investors from using borrowed money to buy crypto, aiming to reduce debt risks;
New rules would apply stricter protections for everyday investors while encouraging responsible crypto businesses in the UK;
Other proposals include blocking retail access to crypto lending, boosting trading transparency, and banning paid order flows.

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The UK’s Financial Conduct Authority (FCA) is planning new rules that would stop regular investors from using borrowed money to buy cryptocurrencies.

David Geale, the FCA’s executive director for payments and digital finance, reportedly stated that while crypto could offer new opportunities for the UK, the industry must have proper protections.

He added that the FCA is not against crypto but sees it as a high-risk area where consumers need more safeguards.

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On May 2, the FCA asked for public feedback on crypto regulation. In its consultation, the regulator said it is considering a rule to stop companies from allowing customers to buy crypto with credit.

The FCA aims to apply stricter standards to services aimed at everyday investors compared to those serving professional clients. According to Geale, the goal is to create a safe and competitive environment that also attracts responsible businesses to the UK.

One major reason for banning credit-based crypto purchases is the risk of people taking on debt they cannot repay if the value of their crypto drops. FCA research from 2024 found that 72% of crypto users use their own money to invest. However, purchases using credit have increased from 6% in 2022 to 14% in 2024.

Other possible rules include stopping regular investors from using crypto lending and borrowing services. Exchanges may be required to treat all trades equally, clearly report pricing and trade execution, and separate their own trading from customer trading. Paying intermediaries for sending orders could be banned. Staking services might have to cover losses caused by third parties.

Recently, the European Union confirmed plans to introduce strict anti-money laundering rules. What do the rules entail? Read the full story.