The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026

Made: 4th February 2026

Coming into force in accordance with regulation 1(2) and (3)

The Treasury make these Regulations in exercise of the powers conferred by sections 21(5), (6), (9), (10) and (15), 22(1) and (5), 71K, 71L, 71M, 71N(2) and (5), 71O(2), (10) and (11), 71P, 71Q, 71R and 428(3) of, and paragraph 25 of Schedule 2 to, the Financial Services and Markets Act 2000 (“the Act”)¹.

In the opinion of the Treasury, one of the effects of these Regulations is that an activity which is not a regulated activity (within the meaning given by section 22 of the Act) will become a regulated activity.

In accordance with sections 71S(2) and 429(2A) and (3) of, and paragraph 26(2)(a) of Schedule 2 to, the Act², a draft of these Regulations has been laid before, and approved by a resolution of, each House of Parliament.

Part 1 — General

Citation, commencement and extent

1

• (1) These Regulations may be cited as the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

• (2) Subject to paragraph (3) these Regulations come into force on 25th October 2027 (the “full commencement day”).

• (3) These Regulations come into force at the end of the period of 21 days beginning with the day after the day on which they are made, for the following purposes—

• (a) enabling the FCA—

• (i) to make or approve designated activity rules and general rules;

• (ii) to give guidance;

• (iii) to give directions;

• (iv) to carry out any other preparatory steps in relation to the exercise of their functions by virtue of these Regulations;

• (b) enabling applications for—

• (i) a Part 4A permission³,

• (ii) a variation of a Part 4A permission, under section 55H of the Act⁴,

• (iii) permission under section 55NA of the Act (general requirement relating to financial promotion approval)⁵, or

• (iv) approval under Part 5 of the Act (performance of regulated activities), under section 59 of the Act (approval for particular arrangements)⁶,

to be made and determined in relation to any activity which becomes a regulated activity by virtue of these Regulations;

• (c) enabling the FCA to exercise any of its powers under Part 4A (permission to carry on regulated activities) or Part 5 (performance of regulated activities) of the Act in relation to any activity which becomes a regulated activity by virtue of these Regulations.

• (4) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Interpretation: general

2

In these Regulations—

• “the Act” means the Financial Services and Markets Act 2000;

• “the Financial Promotion Order” means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;

• “the full commencement day” means the date specified by regulation 1(2) (citation, commencement and extent);

• “qualifying cryptoasset” has the meaning given by article 88F of the Regulated Activities Order (qualifying cryptoassets)⁷;

• “qualifying cryptoasset trading platform” has the meaning given by article 3 of the Regulated Activities Order⁸;

• “qualifying stablecoin” has the meaning given by article 88G of the Regulated Activities Order (qualifying stablecoin)⁹;

• “the Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001¹⁰.

Part 2 — Markets in cryptoassets: designated activities

Chapter 1 — Qualifying cryptoasset public offers and admissions to trading

Interpretation

Interpretation: qualifying cryptoasset public offers and admissions to trading

3

• (1) In this Chapter and Schedule 2 (compensation: exemptions)—

• “advertisement” means a communication which— relates to— a specific offer of a qualifying cryptoasset to the public, or an admission, or proposed admission, of a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform, aims specifically to promote the potential buying of, or subscribing for, a qualifying cryptoasset, and is not a qualifying cryptoasset disclosure document or a supplementary disclosure document, and “advertise” has a corresponding meaning;

• “authorised operator” means a person with a Part 4A permission for carrying on the regulated activity specified by article 9S of the Regulated Activities Order (operating a qualifying cryptoasset trading platform)¹¹;

• “qualifying cryptoasset disclosure document” has the meaning given by regulation 6 (“qualifying cryptoasset disclosure document” and “supplementary disclosure document”);

• “relevant authorised operator”, in respect of a qualifying cryptoasset, means the authorised operator of a qualifying cryptoasset trading platform to which that qualifying cryptoasset is— admitted to trade, or subject to an application for admission to trade;

• “relevant qualifying cryptoasset” has the meaning given by regulation 17(1) (interpretation: market abuse in qualifying cryptoassets and related instruments);

• “supplementary disclosure document” has the meaning given by regulation 6 (“qualifying cryptoasset disclosure document” and “supplementary disclosure document”).

• (2) In this Chapter and the Schedules, any reference to buying, or subscribing for, a qualifying cryptoasset includes a reference to buying, or subscribing for, a right or interest in that qualifying cryptoasset.

• (3) In this Chapter and the Schedules, the “person responsible for the offer” means—

• (a) in relation to the offer of a qualifying cryptoasset to the public—

• (i) the person making the offer, or

• (ii) where the offer is being made on behalf of another, the person on whose behalf the offer is being made;

• (b) in relation to the admission of a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform—

• (i) the person requesting or obtaining admission to trading on the qualifying cryptoasset trading platform, or

• (ii) where, of their own motion, a relevant authorised operator admits a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform operated by them, that relevant authorised operator.

“Issuing qualifying stablecoin” and the “issuer” of that qualifying stablecoin

4

For the purposes of this Chapter—

• (a) a person is “issuing qualifying stablecoin” where that person, whether an authorised person or not, is carrying on the activity described in article 9M of the Regulated Activities Order (issuing qualifying stablecoin)¹²;

• (b) the person described in paragraph (a) is to be considered the “issuer” of that qualifying stablecoin.

“Offer of a qualifying cryptoasset to the public”

5

• (1) For the purposes of this Chapter and the Schedules, there is an offer of a qualifying cryptoasset to the public if there is a communication to any person which presents sufficient information on—

• (a) the qualifying cryptoasset to be offered, and

• (b) the terms on which it is to be offered,

to enable a person to decide to buy or subscribe for the qualifying cryptoasset in question.

• (2) For the purposes of this Chapter, to the extent that an offer of a qualifying cryptoasset is made to a person in the United Kingdom, it is an offer of a qualifying cryptoasset to the public in the United Kingdom.

• (3) The communication referred to in paragraph (1) may be made in any form and by any means.

• (4) In paragraph (1), the reference to an offer of a qualifying cryptoasset to the public includes the placing of a qualifying cryptoasset through an intermediary.

• (5) In paragraph (1), the reference to a communication does not include—

• (a) a communication in connection with trading on a qualifying cryptoasset trading platform;

• (b) a communication made in the course of the activity specified by article 9Z6 of the Regulated Activities Order (qualifying cryptoasset staking)¹³.

“Qualifying cryptoasset disclosure document” and “supplementary disclosure document”

6

In this Chapter and Schedule 2 (compensation: exemptions)—

• (a) “qualifying cryptoasset disclosure document” means, except to the extent that this meaning is modified by regulation 13(3), a document whose publication is required by—

• (i) designated activity rules made by virtue of regulation 9 (designated activity rules: qualifying cryptoasset public offers and admissions to trading), or

• (ii) rules made by the relevant authorised operator, whether or not as a result of designated activity rules,

and which is described by those rules as a qualifying cryptoasset disclosure document;

• (b) “supplementary disclosure document” means, except to the extent that this meaning is modified by regulation 14(6), a document whose publication is required by—

• (i) designated activity rules made by virtue of regulation 9 (designated activity rules: qualifying cryptoasset public offers and admissions to trading), or

• (ii) rules made by the relevant authorised operator, whether or not as a result of designated activity rules,

and which is described by those rules as a supplementary disclosure document.

Designated activities: qualifying cryptoasset public offers and admissions to trading

Designated activities: public offers of qualifying cryptoassets

7

The following activities are specified under section 71K of the Act (designated activities) as designated activities for the purposes of that Act—

• (a) offering a qualifying cryptoasset to the public in the United Kingdom;

• (b) communicating an advertisement relating to such an offer of a qualifying cryptoasset to the public in the United Kingdom;

• (c) disclosing, otherwise than in an advertisement, information relating to such an offer of a qualifying cryptoasset to the public in the United Kingdom;

• (d) disclosing to the public in the United Kingdom information relating to a qualifying stablecoin offered to the public in the United Kingdom, where disclosing that information is not an activity within the scope of paragraphs (a), (b) or (c).

Designated activities: admissions to trading on a qualifying cryptoasset trading platform

8

The following activities are specified under section 71K of the Act (designated activities) as designated activities for the purposes of that Act—

• (a) requesting or obtaining the admission of a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform;

• (b) communicating an advertisement relating to the admission, or proposed admission, of a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform;

• (c) disclosing, otherwise than in an advertisement, information relating to the admission, or proposed admission, of a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform;

• (d) admitting a qualifying cryptoasset to trading on a qualifying cryptoasset trading platform.

Designated activity rules: qualifying cryptoasset public offers and admissions to trading

Designated activity rules: qualifying cryptoasset public offers and admissions to trading

9

• (1) The FCA may make designated activity rules relating to—

• (a) the carrying on of one or more of the activities specified by regulation 7 (designated activities: public offers of qualifying cryptoassets);

• (b) the carrying on of one or more of the activities specified by regulation 8 (designated activities: admissions to trading on a qualifying cryptoasset trading platform).

• (2) The power to make designated activity rules by virtue of paragraph (1) includes power to make designated activity rules relating to the carrying on of one or more of the activities specified by regulation 7 or 8 in relation to a qualifying cryptoasset that has already been—

• (a) offered to the public;

• (b) admitted to trading on a qualifying cryptoasset trading platform.

• (3) Designated activity rules made by virtue of paragraph (1) may provide for liability arising out of the carrying on of an activity specified by regulation 7 or 8 to be determined in accordance with the rules.

• (4) Provision made by virtue of paragraph (3) may include provision excluding civil liability, whether generally or to such extent as may be specified in the rules.

Prohibition of public offers of qualifying cryptoassets

Prohibition of public offers of qualifying cryptoassets

10

• (1) It is unlawful for a qualifying cryptoasset to be offered to the public in the United Kingdom unless—

• (a) the offer is of a kind specified by Part 1 (exceptions from prohibition of offers to the public) of Schedule 1, or

• (b) the offer is of a kind that consists entirely of a combination of two or more of the kinds of offer specified by that Part of that Schedule.

• (2) Part 2 (supplementary provisions relating to Part 1) of Schedule 1 contains provision supplementing Part 1 of that Schedule.

Disclosure of information

Disclosure of information

11

• (1) Paragraph (2) applies in relation to an offer of a qualifying cryptoasset to the public in the United Kingdom if—

• (a) the offer is of a kind specified by Part 1 (exceptions from prohibition of offers to the public) of Schedule 1, and

• (b) the total consideration for the qualifying cryptoasset being offered in the United Kingdom amounts, in value, to at least £500,000, or an equivalent amount (see paragraph (5)).

• (2) In the event that material information is disclosed by, or on behalf of, the person responsible for the offer and addressed to a person considering buying or subscribing for the qualifying cryptoasset in oral or written form, that information must—

• (a) in a case where designated activity rules made by virtue of regulation 9, or rules made by a relevant authorised operator of a qualifying cryptoasset trading platform, require the publication of a qualifying cryptoasset disclosure document, supplementary disclosure document or other document, be included in that qualifying cryptoasset disclosure document, supplementary disclosure document or other document;

• (b) in any other case, be disclosed to any other persons to whom the offer is addressed.

• (3) In determining whether an offer (“offer A”) falls within paragraph (1)(b), offer A is to be taken together with any connected offer of a qualifying cryptoasset of the same kind as that to which offer A relates which was open at any time within the period of 12 months ending with the day on which offer A is first made.

• (4) In paragraph (3), offer A is connected to another offer (the “connected offer”) if the person responsible for offer A is also responsible for the other offer.

• (5) Paragraph 11 of Schedule 1 (meaning of an “equivalent amount”) applies for the purposes of paragraph (1)(b) as it applies for the purposes of Part 1 of that Schedule.

Qualifying cryptoasset disclosure document and supplementary disclosure document

Responsibility for disclosure documents

12

Designated activity rules made by virtue of regulation 9 (designated activity rules: qualifying cryptoasset public offers and admissions to trading) may make provision for determining the person responsible for—

• (a) a qualifying cryptoasset disclosure document;

• (b) a supplementary disclosure document.

General requirements to be met by a qualifying cryptoasset disclosure document or supplementary disclosure document

13

• (1) A qualifying cryptoasset disclosure document must contain the information which is material to a person considering buying or subscribing for the qualifying cryptoasset to enable that person to make an informed assessment of—

• (a) the features of the qualifying cryptoasset including, where applicable—

• (i) the rights and obligations attached to the qualifying cryptoasset;

• (ii) the underlying technology, including any protocol and consensus mechanism, of the qualifying cryptoasset;

• (iii) the governance mechanisms of the qualifying cryptoasset;

• (iv) the mechanisms for creating, destroying and distributing the qualifying cryptoasset;

• (v) any conflicts of interest in relation to the qualifying cryptoasset;

• (b) the risks associated with holding the qualifying cryptoasset;

• (c) where the qualifying cryptoasset seeks or purports to maintain a stable value in relation to another asset or right, features associated with that cryptoasset designed, or which purport, to maintain its stable value, including the holding and management of assets and the application of algorithms to those features;

• (d) any matters relating to—

• (i) the person responsible for the offer;

• (ii) a person who created the qualifying cryptoasset;

• (iii) a person on whose behalf the qualifying cryptoasset was created;

• (iv) where the qualifying cryptoasset is a qualifying stablecoin, the person issuing that stablecoin,

that may impact the price or value of the qualifying cryptoasset;

• (e) any matters relating to the control of the qualifying cryptoasset, including any person exerting such control, that may impact the price or value of that qualifying cryptoasset;

• (f) any underlying assets.

• (2) The information may vary depending on—

• (a) the nature and circumstances of a person mentioned in paragraph (1)(d) or (e),

• (b) the type of qualifying cryptoasset, and

• (c) whether the qualifying cryptoasset has already been admitted to trading on a qualifying cryptoasset trading platform.

• (3) In this regulation, a reference to a qualifying cryptoasset disclosure document is to be read, in relation to a case where a supplementary disclosure document has been subsequently published in relation to it, as a reference to the qualifying cryptoasset disclosure document taken together with the supplementary disclosure document.

• (4) This regulation does not limit any further information, or update in relation to the information required under paragraph (1), required to be included in a qualifying cryptoasset disclosure document or supplementary disclosure document by—

• (a) designated activity rules made by virtue of regulation 9, or

• (b) rules made by the relevant authorised operator.

Compensation for statements in a qualifying cryptoasset disclosure document or supplementary disclosure document

14

• (1) A person responsible for a qualifying cryptoasset disclosure document or supplementary disclosure document is liable to pay compensation to a person who has—

• (a) bought or subscribed for a qualifying cryptoasset to which that document applies, and

• (b) suffered loss in respect of the qualifying cryptoasset as a result of—

• (i) an untrue or misleading statement in that document, or

• (ii) the omission from the qualifying cryptoasset disclosure document or supplementary disclosure document of a matter that is required to be included by regulation 13 (general requirements to be met by a qualifying cryptoasset disclosure document or supplementary disclosure document).

• (2) If a qualifying cryptoasset disclosure document or supplementary disclosure document is required to include information about the absence of a particular matter, the omission from that document of that information is to be treated as a statement in that document that there is no such matter.

• (3) Where the relevant rules require a qualifying cryptoasset disclosure document or a supplementary disclosure document to include a summary containing key information, a person is not to be subject to liability solely on the basis of the summary unless the summary, when read with the rest of that document—

• (a) is misleading, inaccurate or inconsistent, or

• (b) does not provide the key information that is required by those rules to be included in the summary.

• (4) In paragraph (3), “summary” means anything that is described by the relevant rules as a summary.

• (5) A person who fails to comply with a requirement of the relevant rules relating to the publication of a supplementary disclosure document is liable to pay compensation to a person who has—

• (a) bought or subscribed for a qualifying cryptoasset of the kind in question, and

• (b) suffered loss in respect of the qualifying cryptoasset as a result of the failure.

• (6) In paragraph (5) the reference to a supplementary disclosure document includes a reference to a document which the relevant rules provide is to be treated for the purposes of that paragraph as if it were a supplementary disclosure document.

• (7) A loss is not to be regarded as suffered as a result of the statement or omission mentioned in paragraph (1), or the failure to comply with a requirement mentioned in paragraph (5), unless the person suffering it bought, or subscribed for, the relevant qualifying cryptoasset in reliance on—

• (a) a document mentioned in paragraph (1), or

• (b) information in a cryptoasset disclosure document or supplementary disclosure document that would have been amended or supplemented by the document mentioned in paragraph (5).

• (8) In this regulation, “relevant rules” means—

• (a) designated activity rules made by virtue of regulation 9, or

• (b) rules made by a relevant authorised operator.

• (9) In Schedule 2—

• (a) Part 1 contains exemptions from liability under paragraphs (1) and (5), and

• (b) Part 2 contains exemptions from liability under those paragraphs and from other liability.

• (10) This regulation and Part 1 of Schedule 2 do not affect any liability which may be incurred otherwise than by virtue of this regulation.

Withdrawal rights

15

• (1) A person (“P”) who has agreed to buy or subscribe for a qualifying cryptoasset offered to the public may withdraw the acceptance in such circumstances and in such manner as may be specified by designated activity rules made by virtue of regulation 9.

• (2) Designated activity rules made by virtue of regulation 9 may include provision—

• (a) requiring the relevant person to take such steps as may be specified by those rules to inform P of their entitlement to withdraw the acceptance of a right conferred by virtue of paragraph (1);

• (b) providing that, in the event of a failure by the relevant person to comply with a duty imposed under sub-paragraph (a), a transaction resulting from P’s acceptance of the offer is to be void or unenforceable.

• (3) In paragraph (2) “the relevant person” means—

• (a) the person responsible for the offer, or

• (b) the intermediary through whom the qualifying cryptoasset is bought or subscribed for.

• (4) This regulation does not limit a right that P may have otherwise than by virtue of this regulation.

Application of section 85 of the Act (contravention of prohibition relating to public offer of securities)

16

Subsections (3) and (4) of section 85 of the Act (contravention of prohibition relating to public offer of securities)¹⁴ apply in relation to a contravention of regulation 10 (prohibition of public offers of qualifying cryptoassets) as they apply in relation to a contravention of regulation 12 of the Public Offers and Admissions to Trading Regulations 2024.

Chapter 2 — Market abuse in qualifying cryptoassets and related instruments

Interpretation: market abuse in qualifying cryptoassets and related instruments

Interpretation: market abuse in qualifying cryptoassets and related instruments

17

• (1) In this Chapter—

• “authorised cryptoasset person” means a person who has a Part 4A permission for a regulated activity specified by Chapter 2B (cryptoassets) of Part 2 (specified activities) of the Regulated Activities Order¹⁵;

• “financial instrument” has the meaning given by article 3(1) (interpretation) of the Regulated Activities Order¹⁶;

• “inside information” has the meaning given by regulation 18 (inside information);

• “insider dealing” means using inside information as prohibited by regulation 22 (prohibited use of inside information (insider dealing));

• “issuing qualifying stablecoin” has the meaning given by regulation 4 (“issuing qualifying stablecoin” and the “issuer” of that qualifying stablecoin), and related expressions, including the “issuer” of that qualifying stablecoin, are to be read accordingly;

• “legitimate cryptoasset market practice” means a market practice specified as such in designated activity rules made by the FCA by virtue of regulation 34 (legitimate cryptoasset market practice);

• “market abuse” means any activity prohibited by— regulation 22 (prohibited use of inside information (insider dealing)); regulation 24 (prohibition on the disclosure of inside information); regulation 28 (prohibition of market manipulation);

• “market manipulation” has the meaning given by regulation 19 (market manipulation);

• “operator of a qualifying cryptoasset trading platform” means a person who has a Part 4A permission for the regulated activity specified by article 9S (operating a qualifying cryptoasset trading platform) of the Regulated Activities Order in respect of that platform;

• “person responsible for the offer”, in relation to a qualifying cryptoasset, has the meaning given by regulation 3(3) (interpretation: qualifying cryptoasset public offers and admissions to trading);

• “related instrument” means a financial instrument or specified investment whose price or value depends on, or has an effect on, the price or value of a relevant qualifying cryptoasset, but does not include a financial instrument or specified investment which— is a relevant qualifying cryptoasset, or falls within Article 2(1) of the market abuse regulation (scope)¹⁷;

• “relevant dealer in principal”, in relation to a relevant qualifying cryptoasset, means a person who carries on an activity of a kind described in article 9T of the Regulated Activities Order (dealing in qualifying cryptoassets as principal)¹⁸ in relation to that cryptoasset;

• “relevant issuer” means— in relation to a relevant qualifying cryptoasset— the issuer of a qualifying stablecoin, or in any other case, a person (“A”) where— A offers a qualifying cryptoasset, or arranges for another to offer that qualifying cryptoasset to the public, and that qualifying cryptoasset is created by, or on behalf of, A for sale or subscription; in relation to a related instrument, the issuer of that instrument;

• “relevant qualifying cryptoasset” means a qualifying cryptoasset that has been admitted to trading, or is subject to an application seeking admission to trading, on a qualifying cryptoasset trading platform operated by a person with a Part 4A permission for the activity specified by article 9S of the Regulated Activities Order (operating a qualifying cryptoasset trading platform) in relation to that platform;

• “specified investment” means an investment of a kind specified by Part 3 of the Regulated Activities Order (specified investments).

• (2) For the purposes of this Chapter, issuing, and any related expression, does not include the minting of a relevant qualifying cryptoasset, such that it first exists as—

• (a) an identifiable asset on the blockchain, and

• (b) in a transferable form.

• (3) For the purposes of this Chapter, making a recommendation includes providing an inducement forming part of or related to that recommendation.

• (4) For the purposes of this Chapter, a “relevant person”, in relation to a relevant qualifying cryptoasset or a related instrument, means—

• (a) a relevant issuer of that relevant qualifying cryptoasset or related instrument,

• (b) a person responsible for the offer of that relevant qualifying cryptoasset or related instrument,

• (c) an operator of a qualifying cryptoasset trading platform on which that relevant qualifying cryptoasset is—

• (i) admitted to trading, or

• (ii) subject to an application seeking admission to trading, or

• (d) a relevant dealer in principal.

• (5) For the purposes of this Chapter, the person responsible for the offer of a related instrument is the person who is for the purposes of the market abuse regulation the offeror of that instrument.

Inside information

18

• (1) In this Chapter, “inside information” is to be read in accordance with this regulation.

• (2) “Inside information” means information of a precise nature, which has not been made public, relating, directly or indirectly, to—

• (a) a relevant issuer of a relevant qualifying cryptoasset or a related instrument;

• (b) a person responsible for the offer of a relevant qualifying cryptoasset or a related instrument;

• (c) an operator of a qualifying cryptoasset trading platform on which a relevant qualifying cryptoasset is—

• (i) admitted to trading, or

• (ii) subject to an application seeking admission to trading, or

• (d) a relevant qualifying cryptoasset or related instrument,

which, if it were made public, would be likely to have a significant effect on the price of that relevant qualifying cryptoasset or related instrument.

• (3) Where any person to whom this Chapter applies is executing orders for a relevant qualifying cryptoasset or a related instrument on behalf of clients, “inside information” also includes information of a precise nature, which has not been made public, conveyed by a client and relating both to the client’s pending orders for a relevant qualifying cryptoasset or a related instrument and, directly or indirectly, to—

• (a) a relevant issuer of a relevant qualifying cryptoasset or a related instrument;

• (b) a person responsible for the offer of a relevant qualifying cryptoasset or a related instrument;

• (c) an operator of a qualifying cryptoasset trading platform on which a relevant qualifying cryptoasset is—

• (i) admitted to trading, or

• (ii) subject to an application seeking admission to trading, or

• (d) a relevant qualifying cryptoasset or related instrument,

which, if it were made public, would be likely to have a significant effect on the price of that relevant qualifying cryptoasset or related instrument.

• (4) For the purposes of paragraphs (2) and (3)—

• (a) information is to be considered of a precise nature if it indicates a set of circumstances which exists or which may reasonably be expected to come into existence, or an event which has occurred or which may reasonably be expected to occur, where it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the price of a relevant qualifying cryptoasset or related instrument;

• (b) in the case of an ongoing process that is intended to bring about, or that results in, a particular circumstance or event, that future circumstance or event, and also the intermediate steps of that process which are connected with bringing about or resulting in that future circumstance or event, is to be considered precise information;

• (c) an intermediate step in an ongoing process is to be considered inside information if, in and of itself, it satisfies the criteria of inside information referred to in sub-paragraph (a);

• (d) information which, if it were made public, would be likely to have a significant effect on the price of a relevant qualifying cryptoasset or related instrument means information that a reasonable person would be likely to use as the basis, or part of the basis, of the person’s investment decisions.

Market manipulation

19

• (1) For the purposes of this Chapter, “market manipulation” means any of the following activities—

• (a) entering into a transaction, placing an order to trade or engaging in any other behaviour which—

• (i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a relevant qualifying cryptoasset or related instrument, or

• (ii) secures, or is likely to secure, the price of a relevant qualifying cryptoasset or related instrument at an abnormal or artificial level;

• (b) entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of a relevant qualifying cryptoasset or related instrument, while employing a fictitious device or any other form of deception or contrivance;

• (c) disseminating information, including the dissemination of rumours, through the media, including the internet, or by any other means which—

• (i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of a relevant qualifying cryptoasset or related instrument, or

• (ii) secures, or is likely to secure, the price of a relevant qualifying cryptoasset or related instrument at an abnormal or artificial level,

where the person who engaged in the dissemination knew, or ought to have known, that the information was false or misleading;

• (d) transmitting false or misleading information or providing false or misleading input in relation to a benchmark where the person who made the transmission or provided the input knew or ought to have known that it was false or misleading, or any other behaviour which manipulates the calculation of a benchmark.

• (2) The following are examples of behaviour that is to be considered market manipulation—

• (a) securing a dominant position over the supply of, or demand for, a relevant qualifying cryptoasset or related instrument, which has, or is likely to have, the effect of fixing, directly or indirectly, purchase or sale prices or creates, or is likely to create, other unfair trading conditions;

• (b) the placing, cancellation, modification or revocation of orders for a relevant qualifying cryptoasset on a qualifying cryptoasset trading platform by any available means of trading, including electronic means such as algorithmic and high-frequency trading strategies, in such a way as to produce an effect referred to in paragraph (1)(a)(i) or (ii) by—

• (i) disrupting or delaying the functioning of the qualifying cryptoasset trading platform, or engaging in any activities likely to have that effect;

• (ii) making it more difficult for other persons to identify genuine orders on the qualifying cryptoasset trading platform, or engaging in any activities likely to have that effect, including by entering orders which result in the destabilisation of the normal functioning of the trading platform;

• (iii) creating a false or misleading signal about the supply of, or demand for, or price of, a relevant qualifying cryptoasset, in particular by entering orders to initiate or exacerbate a trend, or engaging in any activities likely to have that effect;

• (c) taking advantage of occasional or regular access to the traditional or electronic media by voicing an opinion about a relevant qualifying cryptoasset or related instrument, while having previously taken positions on that relevant qualifying cryptoasset or related instrument, and profiting subsequently from the impact of the opinions voiced on the price of that relevant qualifying cryptoasset or related instrument, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way.

• (3) For the purposes of this Chapter, it is immaterial where the activities specified by this regulation are carried out.

Designated activities: use and disclosure of inside information and market manipulation

Designated activities: use and disclosure of inside information and market manipulation

20

The following activities are specified under section 71K of the Act (designated activities) as designated activities in relation to qualifying cryptoassets and related instruments for the purposes of that Act—

• (a) the use and disclosure of inside information;

• (b) market manipulation.

FCA powers: designated activity rules

Designated activity rules: market abuse in qualifying cryptoassets and related instruments

21

• (1) The FCA may make designated activity rules relating to the carrying on of one or more of the activities specified by regulation 20 (designated activities: use and disclosure of inside information and market manipulation).

• (2) Designated activity rules made by virtue of paragraph (1) may provide for liability relating to the carrying on of an activity specified by regulation 20 to be determined in accordance with the rules.

• (3) Provision made by virtue of paragraph (2) may include provision excluding civil liability, whether generally or to such extent as may be specified in the rules.

Prohibited use of inside information (insider dealing)

Prohibited use of inside information (insider dealing)

22

• (1) A person to whom this paragraph applies by virtue of paragraph (4) or (5) is prohibited from—

• (a) using the inside information by—

• (i) acquiring or disposing of, or attempting to acquire or dispose of, a relevant qualifying cryptoasset or related instrument to which that information relates, for that person’s own account or on the account of another, either directly or indirectly, or

• (ii) cancelling or amending, or attempting to cancel or amend, an order concerning a relevant qualifying cryptoasset or related instrument to which that information relates, for that person’s own account or on the account of another, either directly or indirectly;

• (b) making a recommendation to, or inducing, another person, on the basis of the inside information—

• (i) to acquire or dispose of a relevant qualifying cryptoasset or related instrument to which that information relates, or

• (ii) to cancel or amend an order concerning a relevant qualifying cryptoasset or related instrument to which that information relates.

• (2) A person is prohibited from using or relying on, or attempting to use or rely on, a recommendation within the scope of sub-paragraph (1)(b) if the person knows, or ought to have known, that the recommendation is made on the basis of inside information.

• (3) For the purposes of paragraph (1)—

• (a) it is immaterial whether the order mentioned in sub-paragraph (a)(ii) or (b)(ii) of that paragraph was placed before or after the person to whom that paragraph applies came into possession of the inside information;

• (b) engaging or attempting to engage in insider dealing under paragraph (1)(a) or (2) includes where carried on for that person’s own account or for the account of a third party;

• (c) the use of inside information includes submitting, modifying or withdrawing a bid by a person referred to in paragraph (4) or (5).

• (4) Paragraph (1) applies to a person who possesses inside information as a result of—

• (a) exercising administrative, management or supervisory functions of a relevant person,

• (b) having a holding in the capital of—

• (i) a relevant issuer of that relevant qualifying cryptoasset or related instrument,

• (ii) a person responsible for the offer of that relevant qualifying cryptoasset or related instrument, or

• (iii) a person who applied for or is seeking admission to trading on a qualifying cryptoasset trading platform for that relevant qualifying cryptoasset,

• (c) having access to the information through the exercise of their employment, profession or duties, or

• (d) having acquired the information through criminal activity.

• (5) Paragraph (1) also applies to a person, other than one within paragraph (4), who knows, or ought to have known, that the information is inside information.

• (6) For the purposes of this Chapter, it is immaterial where the activities specified by this regulation are carried out.

Exclusions: insider dealing

23

• (1) A person does not contravene any prohibition in regulation 22 (prohibited use of inside information (insider dealing))—

• (a) where the conduct that would otherwise fall within that regulation is a legitimate cryptoasset market practice, or

• (b) in circumstances specified in designated activity rules made by virtue of paragraph (2).

• (2) The FCA may make designated activity rules—

• (a) specifying circumstances in which a person who possesses inside information is not to be regarded as—

• (i) using that information;

• (ii) contravening the prohibition in regulation 22;

• (b) in relation to the application of sub-paragraph (a) as the FCA considers appropriate.

Unlawful disclosure of inside information

Prohibition on the disclosure of inside information

24

• (1) A person to whom this paragraph applies as a result of paragraph (3) or (4) is prohibited from disclosing that information to any other person, unless the disclosure is made in the normal course of the exercise of their employment, profession or duties.

• (2) Where a person (“A”) discloses a recommendation or inducement referred to in regulation 22(1)(b), which A knows or ought to know to have been based on inside information, the onward disclosure of that recommendation or inducement is prohibited, unless the disclosure is made in the normal course of the exercise of their employment, profession or duties.

• (3) Paragraph (1) applies to a person who possesses inside information as a result of—

• (a) exercising administrative, management or supervisory functions of a relevant person;

• (b) having a holding in the capital of—

• (i) a relevant issuer of that relevant qualifying cryptoasset or related instrument,

• (ii) a person responsible for the offer of that relevant qualifying cryptoasset or related instrument, or

• (iii) a person who applied for or is seeking admission to trading on a qualifying cryptoasset trading platform for that relevant qualifying cryptoasset,

• (c) having access to the information through the exercise of their employment, profession or duties, or

• (d) having acquired the information through criminal activity.

• (4) Paragraph (1) also applies to a person, other than one within paragraph (3), who knows, or ought to have known, that the information is inside information.

Exclusions: prohibition on the disclosure of inside information

25

• (1) A person (“A”) does not contravene any prohibition in regulation 24 (prohibition on the disclosure of inside information) where—

• (a) the conduct that would otherwise fall within that regulation is a legitimate cryptoasset market practice, or

• (b) A discloses the information for the purposes of journalism.

• (2) Paragraph (1)(b) does not apply where—

• (a) A, or a person closely associated with A, derived, directly or indirectly, an advantage or profits from the disclosure, or

• (b) A disclosed the information with the intention of misleading the market as to the supply of, demand for, or price of a relevant qualifying cryptoasset or related instrument.

• (3) For the purposes of paragraph (2)(a), a “person closely associated” has the meaning given by Article 3.1(26) of the market abuse regulation (definitions), as read with section 131AC of the Act¹⁹.

Public disclosure of inside information

26

• (1) Subject to regulation 27 (public disclosure of inside information: delayed disclosure), a relevant person (“A”) must, where so required by designated activity rules made by virtue of paragraph (2), inform the public—

• (a) as soon as possible of inside information that directly concerns A, and

• (b) in a manner that enables fast access as well as complete, correct and timely assessment of the information by the public.

• (2) The FCA may make designated activity rules—

• (a) specifying the relevant persons to whom this provision applies;

• (b) concerning the form, type, timing and technical means of disclosure required by this regulation;

• (c) in relation to the application of this regulation as the FCA considers appropriate.

• (3) Where information is disclosed under paragraph (1), A must file the information with such a body as may be specified by designated activity rules.

Public disclosure of inside information: delayed disclosure

27

• (1) A relevant person may delay the public disclosure of inside information, under regulation 26 (public disclosure of inside information), in accordance with any applicable designated activity rules made by virtue of paragraph (2).

• (2) The FCA may make designated activity rules concerning—

• (a) the form, type, timing of and arrangements for notifications to delay disclosure;

• (b) the conditions under which disclosure may be delayed;

• (c) the conditions or circumstances when disclosure would need to be made;

• (d) such matters related to this regulation as the FCA considers appropriate.

Market manipulation

Prohibition of market manipulation

28

Engaging in, or attempting to engage in, market manipulation is prohibited.

Exclusions: market manipulation

29

• (1) A person (“A”) does not contravene the prohibition in regulation 28 (prohibition of market manipulation) where—

• (a) the conduct that would otherwise fall within that regulation is a legitimate cryptoasset market practice, or

• (b) A disclosed or disseminated the information for the purposes of journalism.

• (2) Paragraph (1)(b) does not apply where—

• (a) A, or a person closely associated with A, derived, directly or indirectly an advantage or profits from the disclosure or dissemination, or

• (b) A disclosed or disseminated the information with the intention of misleading the market as to the supply of, demand for, or price of a relevant qualifying cryptoasset or related instrument.

• (3) For the purposes of paragraph (2)(a), a “person closely associated” has the meaning given by Article 3.1(26) of the market abuse regulation (definitions), as read with section 131AC of the Act.

Systems and procedures to prevent, detect and disrupt market abuse of relevant qualifying cryptoassets and related instruments

Systems and procedures for trading relevant qualifying cryptoassets and related instruments

30

• (1) This regulation applies—

• (a) in relation to relevant qualifying cryptoassets, to an authorised person with a Part 4A permission to carry on a regulated activity specified by any of the following provisions of the Regulated Activities Order—

• (i) article 9S (operating a qualifying cryptoasset trading platform);

• (ii) article 9T (dealing in qualifying cryptoassets as principal);

• (iii) article 9W (dealing in qualifying cryptoassets as agent)²⁰;

• (iv) article 9Y (arranging deals in qualifying cryptoassets)²¹;

• (b) in relation to related instruments, to an authorised person with a Part 4A permission to carry on a regulated activity specified by any of the following provisions of the Regulated Activities Order—

• (i) article 14 (dealing in investments as principal);

• (ii) article 21 (dealing in investments as agent);

• (iii) article 25 (arranging deals in investments).

• (2) A person to whom this regulation applies must establish and maintain effective arrangements, systems and procedures aimed at preventing, detecting and disrupting—

• (a) insider dealing;

• (b) market manipulation;

• (c) attempted insider dealing;

• (d) attempted market manipulation.

• (3) Where a person within the scope of paragraph (1)(a)(ii), (iii) or (iv) or (b) (“A”) reasonably suspects that an order or transaction in relation to any relevant qualifying cryptoasset or related instrument, whether placed or executed on, or outside, a qualifying cryptoasset trading platform, could constitute—

• (a) insider dealing,

• (b) market manipulation,

• (c) attempted insider dealing, or

• (d) attempted market manipulation,

that person must notify the operator of the qualifying cryptoasset trading platform (“B”) without unnecessary delay, in accordance with any applicable designated activity rules made by virtue of paragraph (5).

• (4) When receiving information in a notification under paragraph (3), B must comply with any applicable designated activity rules made by virtue of paragraph (5).

• (5) The FCA may make designated activity rules in relation to—

• (a) the design, scope and application of arrangements, systems and procedures to be put in place for the purposes of paragraph (2);

• (b) notifications under paragraph (3), including specifying—

• (i) that the notification by A or B’s use of information received in such a notification will not—

• (aa) give rise to a breach of any obligation of confidence owed by A or B, or

• (bb) give rise to any civil liability, on the part of A or B, to the person to whom the disclosed information relates;

• (ii) such additional conditions in relation to sub-paragraph (b)(i)(aa) or (bb) as the FCA considers appropriate;

• (c) restrictions on onward transmission or use of information received by B pursuant to a notification under paragraph (3);

• (d) such matters related to this regulation as the FCA considers appropriate.

Insider lists for relevant qualifying cryptoassets and related instruments

Insider lists for relevant qualifying cryptoassets and related instruments

31

• (1) A relevant person must, where required to do so under any applicable designated activity rules made by virtue of paragraph (2)—

• (a) draw up a list of all persons who have access to inside information and who are working for the relevant person under a contract of employment, or otherwise performing tasks through which they have access to inside information, such as advisers, accountants or credit rating agencies (an “insider list”),

• (b) maintain and update that insider list, and

• (c) provide that insider list to the FCA upon its request.

• (2) The FCA may make designated activity rules—

• (a) specifying the relevant persons to whom this provision applies;

• (b) concerning the form, content, maintenance, updating and recording of an insider list for the purposes of paragraph (1), including how and when a relevant person must provide an insider list to the FCA;

• (c) on such matters related to this regulation as the FCA considers appropriate.

Information sharing

Cases in which sharing of information authorised or required

32

• (1) A person referred to in regulation 30(1)(a) or (b) (“A”) or another person (“B”) may disclose to a authorised cryptoasset person (“C”) information, including inside information, for the purpose of detecting, preventing or disrupting market abuse, in accordance with any applicable designated activity rules made by virtue of paragraph (4).

• (2) A person referred to in regulation 30(1)(a) or (b) (“A”) must disclose to a authorised cryptoasset person (“C”) information, including inside information, for the purpose of detecting, preventing or disrupting market abuse, in accordance with any applicable designated activity rules made by virtue of paragraph (4).

• (3) When receiving information from A or B pursuant to a disclosure under paragraph (1) or (2), C must comply with any applicable designated activity rules made by virtue of paragraph (4).

• (4) The FCA may make designated activity rules specifying—

• (a) the persons to whom paragraphs (1) and (2) apply;

• (b) the situations where disclosure is required or permitted;

• (c) the form and content of, and the mechanisms for, any disclosure under this regulation;

• (d) in relation to a disclosure under paragraph (1) or (2)—

• (i) that the disclosure by A or B, or C’s use of the disclosed information will not—

• (aa) give rise to a breach of any obligation of confidence owed by A, B or C, or

• (bb) give rise to any civil liability, on the part of A, B or C, to the person to whom the disclosed information relates;

• (ii) such additional conditions in relation to sub-paragraph (d)(i)(aa) or (bb) as the FCA considers appropriate;

• (e) restrictions on onward transmission or use of information received by C pursuant to a disclosure under this regulation;

• (f) such matters related to this regulation as the FCA considers appropriate.

Protected disclosures

33

• (1) A disclosure that satisfies all of the three conditions specified by this regulation is to be taken to not breach any restriction on the disclosure of information (however imposed).

• (2) The first condition is that the information or other matter—

• (a) causes the person making the disclosure (“P”) to know or suspect, or

• (b) gives them reasonable grounds for knowing or suspecting,

that another person has contravened regulation 22 (prohibited use of inside information (insider dealing)), regulation 24 (prohibition on the disclosure of inside information) or regulation 28 (prohibition of market manipulation).

• (3) The second condition is that the information or other matter disclosed came to the attention of P in the course of their trade, profession, business or employment.

• (4) The third condition is that disclosure is made to a nominated officer as soon as is practicable after the information or other matter came to the attention of P.

• (5) A disclosure to a nominated officer is a disclosure which is made—

• (a) to a person nominated by the discloser’s employer to receive disclosures under this regulation,

• (b) in the course of the discloser’s employment, and

• (c) in accordance with the procedure established by the employer for the purpose.

• (6) For the purposes of this regulation, references to a person’s employer include any body, association or organisation, including a voluntary organisation, in connection with whose activities the person exercises a function, whether or not for gain or reward, and references to employment must be construed accordingly.

Legitimate cryptoasset market practice

Legitimate cryptoasset market practice

34

• (1) The FCA may by designated activity rules specify a market practice as a legitimate cryptoasset market practice.

• (2) In making designated activity rules by virtue of paragraph (1), the FCA must take account of the following matters—

• (a) whether the market practice provides for an appropriate level of transparency to the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (b) whether the market practice supports the effective functioning of the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (c) whether the market practice supports the liquidity and efficiency of the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (d) whether the market practice supports order and transparent pricing in the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (e) whether the market practice enables market participants in the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments to react properly and in a timely manner to any new situation created by that practice;

• (f) whether the market practice does not create inappropriate or disproportionate risks to the integrity of the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (g) whether the current market practice supports the legitimate handling and disclosure of inside information in relation to relevant qualifying cryptoassets and related instruments, and does not create inappropriate or disproportionate risks in relation to the unlawful disclosure of inside information or insider dealing;

• (h) whether the market practice supports the effective, efficient and orderly settlement in the financial services markets in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (i) whether the market practice supports innovation in the financial services market in the United Kingdom in relation to relevant qualifying cryptoassets and related instruments;

• (j) the current market practice in relation to the processing of inside information in relation to qualifying cryptoassets and related instruments.

• (3) In considering the matters specified by paragraph (2) above, the FCA must have regard to—

• (a) the nature and type of the relevant qualifying cryptoasset or related instrument and its market, and

• (b) the nature and type of market participants, including the extent of individual participation.

Chapter 3 — General provisions relating to cryptoasset designated activities

Reporting of infringements

Reporting of infringements

35

• (1) An employer who carries on any of the regulated activities specified by Chapter 2B (cryptoassets) of Part 2 (specified activities) of the Regulated Activities Order must have in place appropriate internal procedures for their employees or workers to report, through an independent channel, contraventions or potential contraventions of an applicable provision.

• (2) In paragraph (1)—

• “applicable provision” means— a provision of this Part, or a provision of designated activity rules made by virtue of this Part;

• “employer”, “employee” and “worker” each has the meaning given by section 230 of the Employment Rights Act 1996²².

Rule-making powers of the FCA

Disapplication or modification of rules

36

• (1) Designated activity rules made by virtue of this Part may include provision enabling requirements imposed by the rules to be dispensed with, or modified, in such cases or circumstances as may be determined by the FCA under the rules.

• (2) The FCA may publish any decision made by virtue of paragraph (1) in the way appearing to the FCA to be best calculated to bring it to the attention of persons likely to be affected by it.

Power of the FCA to give directions

Power of the FCA to give directions

37

The FCA may give a direction under section 71O of the Act (designated activities: directions) to a person imposing on that person such requirements as the FCA considers appropriate in relation to the carrying on of an activity that is a designated activity by virtue of—

• (a) regulation 7 (designated activities: public offers of qualifying cryptoassets);

• (b) regulation 8 (designated activities: admissions to trading on a qualifying cryptoasset trading platform);

• (c) regulation 20 (designated activities: market abuse in qualifying cryptoassets and related instruments).

Designated activity enforcement by the FCA: cryptoasset designated activities

FCA’s power to require information from persons not subject to a requirement imposed by virtue of any other provision of this Part: cryptoasset designated activities

38

• (1) This regulation applies—

• (a) to a person (“P”) who is not subject to a requirement imposed by virtue of any other provision of this Part, and

• (b) only to information and documents reasonably required by the FCA in connection with the exercise by the FCA of its functions under or by virtue of this Part.

• (2) The FCA may, by notice in writing given to P, require P —

• (a) to provide specified information or information of a specified description;

• (b) to produce specified documents or documents of a specified description.

• (3) The information or documents must be provided or produced—

• (a) before the end of such reasonable period as may be specified, and

• (b) at such place as may be specified.

• (4) An officer who has written authorisation from the FCA to do so may require P without unnecessary delay—

• (a) to provide the officer with specified information or information of a specified description;

• (b) to produce to the officer specified documents or documents of a specified description.

• (5) The FCA may require any information provided under this regulation to be provided in such form as it may reasonably require.

• (6) The FCA may require—

• (a) any information provided, whether in a document or otherwise, to be verified;

• (b) any document produced to be authenticated,

in such manner as it may reasonably require.

• (7) In this regulation—

• “officer” means an officer of the FCA and includes a member of the FCA’s staff or an agent of the FCA;

• “specified” means— in paragraphs (2) and (3), specified by the notice, and in paragraph (4), specified by the authorisation.

Liability for contravention of a prohibition in regulation 22, 24 or 28

39

A person contravenes regulation 22, 24 or 28 whether the contravention is by that person alone or by that person jointly or in concert with one or more other persons.

Part 3 — Amendment of the Regulated Activities Order

Amendment of the Regulated Activities Order

40

• (1) The Regulated Activities Order is amended as follows.

• (2) In article 3 (interpretation), at the appropriate places, insert—

• “authorised cryptoasset custodian” means an authorised person who has a Part 4A permission to carry on the regulated activity specified by article 9N(1)(a) (safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets)²³;
• “qualifying cryptoasset” has the meaning given by article 88F (qualifying cryptoassets);
• “qualifying cryptoasset trading platform” means a system in which multiple third-party buying and selling trading interests in qualifying cryptoassets are able to interact within the system and which brings together multiple third-party buying and selling interests in qualifying cryptoassets in a way that results in a contract for the exchange of qualifying cryptoassets for— money, including electronic money, or other qualifying cryptoassets;
• “qualifying stablecoin” has the meaning given by article 88G (qualifying stablecoin);
• “relevant specified investment cryptoasset” has the meaning given by article 9N(5)(b);
• “specified investment cryptoasset” means a cryptoasset that— is a specified investment as a result of Part 3 (specified investments)— excluding article 88F (qualifying cryptoassets), and including where the cryptoasset is a right to or an interest in such a specified investment by operation of article 89 (rights to or interests in investments), and would be a qualifying cryptoasset if sub-paragraphs (a) to (c) of article 88F(4) were disregarded;

• (3) In article 5(2) (accepting deposits), for “9A” substitute “9AZA”²⁴.

• (4) After article 9A (sums received in exchange for electronic money)²⁵ insert—

(9AZA) A sum is not a deposit for the purposes of article 5 (accepting deposits)²⁶ if it is immediately exchanged for qualifying stablecoin.

• (5) After article 9K (record of certified persons) insert—