FCA Targets Crypto Proxies With New Protection Rules

Crypto News Regulation

FCA Targets Crypto Proxies: New Investor Protection Rules on the Horizon

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 09, 2025

Key Takeaways

FCA seeks crypto industry feedback on proposed investment rule changes to make the UK system clearer and more balanced;
Regulator highlights that poor trading app outcomes often stem from crypto and CFD activity lacking proper safeguards;
Proposed rules would simplify client classification and give firms more responsibility for accurate investor assessment.

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FCA Targets Crypto Proxies: New Investor Protection Rules on the Horizon

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The Financial Conduct Authority (FCA), the UK’s financial regulator, has invited feedback from cryptocurrency businesses on a set of proposed updates to investment rules.

The FCA has issued two documents, a discussion paperand a consultation paper, which outline possible updates to how clients are classified, how conflicts of interest are managed, and how consumers can access investment products.

The regulator aims to make the system clearer and more balanced for both companies and investors.

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According to the FCA’s analysis, most poor outcomes on high-engagement trading apps are linked to transactions involving cryptocurrencies and contracts for difference. It raised concerns that users often trade digital assets or similar products without clear limits, risk warnings, or suitability checks.

The FCA noted that these conditions can expose less experienced investors to losses.

The regulator also addressed how firms assess whether a client qualifies as a professional investor. It proposed guidance stating that a history of trading in high-risk or crypto-related products should not automatically indicate professional experience unless there is clear evidence that the client meets other relevant standards.

The FCA said these revisions are intended to simplify existing rules, remove unnecessary requirements, and place greater responsibility on firms to assess clients accurately and apply sound judgment.

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