FCA Unveils New Crypto Regulations: A Roadmap for Businesses
The Financial Conduct Authority (FCA) has introduced new regulations for cryptoassets, which will come into effect on October 25, 2027. However, the FCA is already facilitating a smooth transition to the new regime by enabling designated activity rules, providing guidance and directions, and allowing applications for Part 4A permissions.
The new regulations cover a wide range of crypto activities, including operating trading platforms, issuing stablecoins, dealing in cryptoassets as principal or agent, arranging deals, staking, and safeguarding. Businesses engaging in these activities will need to build out compliance frameworks, internal controls, and financial reporting processes that meet the FCA's expectations.
Accounting firms are well-positioned to assist businesses with this process, particularly when it comes to ensuring they have robust valuation methodologies and classification frameworks to support their disclosure statements. The new regulations also require businesses to maintain effective systems for detecting and preventing market abuse, as well as keeping insider lists available for the FCA on request.
The prudential framework under PS26/12 requires authorized cryptoasset firms to meet capital adequacy, liquidity, risk management, and public disclosure obligations. Accountants can help firms build financial models, capital adequacy calculations, and liquidity forecasting that these requirements demand.