UK FCA seeks input from the crypto industry, plans to advance investment rule reforms and strengthen risk control

Odaily Planet Daily News: The UK Financial Conduct Authority (FCA) has released discussion and consultation papers proposing a series of reform recommendations aimed at “enhancing the UK’s investment culture,” and is formally seeking feedback from the crypto industry. The FCA stated that while it plans to “expand consumer investment channels,” it will also adjust rules related to client classification and conflicts of interest. The FCA pointed out that poor investment performance on high digital engagement (DEP) apps is almost entirely due to crypto asset and contract for difference (CFD) trading. The regulator emphasized that some users are investing through “crypto asset proxy products” without investment limits, risk warnings, or suitability tests, posing significant potential risks. In the consultation paper, the FCA recommends new guidance: for clients whose primary investment history is concentrated in high-risk speculative assets or crypto assets, this should not be regarded as evidence of “professional investment capability” unless there is sufficient proof that they meet professional investor thresholds, including the ability to bear potential losses. The FCA stated that this reform aims to streamline the regulatory framework, placing clearer review responsibilities on institutions rather than relying on the previously “rather casual tests.” Regulatory authorities require companies involved in crypto asset consulting or sales to submit feedback by February and March next year. In recent years, the UK has gradually advanced the modernization of crypto regulation, including officially recognizing digital assets as “property” in 2024, providing clearer legal grounds for cases such as theft and bankruptcy. Meanwhile, the government is also assessing whether to ban crypto asset donations to political parties. (Cointelegraph)