The UK government has finally published a detailed draft statutory instrument and accompanying policy note, which provide long-awaited additional clarity on the shape of the regulatory regime for cryptoassets in the UK. The Financial Conduct Authority (FCA) has also recently closed for consultation a discussion paper seeking views on its approach to regulating various types of cryptoasset activity, with a further consultation to follow if parts of the paper are progressed. These efforts fit within the wider FCA Crypto Roadmap that charts the course for cryptoasset regulation in forthcoming years.

However, and perhaps inevitably, there is uncertainty in implementation and divergence of opinion on aspects of the reform. With these developments, we will see a wholesale change in the regulatory landscape for cryptoassets in the UK. This will have significant consequences for all businesses engaging, or seeking to engage, in activities involving cryptoassets.

More broadly, the new regime may help to ameliorate the potential for fraud in this area, as well as enhance safeguards to ensure better consumer protection and provide clarity to businesses carrying on activity in this space. Nonetheless, it needs to be balanced against stifling innovation and investment.

The reforms may also result in changes in the type of cryptoasset litigation we have seen reach the courts to date, with a move away from the enforcement, disclosure and injunction cases to trace and recover cryptoassets arising from fraud, towards decisions related to the new regulatory framework and delineating the rights and obligations that may attach to cryptoassets.

In this article, Claire Harrop, Cyrus Pocha, Emma Probyn, Tom Clark and Laura Feldman from our London Financial Services Regulatory and Disputes teams explore the proposals to bring cryptoassets within the regulatory perimeter, summarise the current and new regimes and assess some of the challenges that may materialise.

This briefing was originally published in Butterworths Journal of International Banking and Financial Law in the October 2025 issue.