Treasury rules set to regulate the crypto market from 2027. Here’s what you need to know

The government (15 December 2025) has revealed plans to regulate cryptocurrencies in a similar way to other financial products. Find out what this means for investors and what to consider before you make crypto part of your investment portfolio.

As a relatively new asset class, crypto isn’t currently regulated. This means crypto investors don’t benefit from the same level of protection that other investors do. The government said the move aims to boost consumer confidence and transparency, helping to make the UK a global destination for digital assets.

The rules will be overseen by the Financial Conduct Authority (FCA) and are expected to come into force in 2027.

Chancellor Rachel Reeves said: “Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world-leading financial centre in the digital age.

“By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate, and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.”

Around 12% of UK adults own crypto

It’s not surprising that the government has decided to regulate the crypto market. It’s been growing in recent years.

Indeed, research carried out by the FCA (26 November 2024) found that 12% of UK adults owned crypto at the end of 2024. On average, these investors held £1,842 in cryptoassets. However, around a third of people wrongly believed they could raise a complaint with the FCA if something went wrong and they needed recourse.

If you’re interested in cryptoassets, here’s what the new regulations could mean for you.

1. You could be protected if a regulated crypto firm collapsed

While the full details haven’t been released yet, the new plans could mean regulated crypto firms will be part of the Financial Services Compensation Scheme (FSCS).

The FSCS protects consumers when authorised financial services firms fail. For example, if your UK-authorised bank or building society collapsed, the FSCS would automatically compensate you up to £120,000.

So, if you invested in cryptoassets through a regulated firm, some of your money may be protected.

However, it’s important to note that the FSCS only provides compensation where a firm fails. It does not compensate you if your investments perform poorly and you lose money as a result.

Even with the new rules, crypto will remain a high-risk investment, and many cryptoassets experience significant volatility. You should ensure the risks are aligned with your goals and risk profile before you proceed.

2. Investors could benefit from greater clarity about the risks

One of the challenges of investing in crypto at the moment is that firms aren’t always clear about the risks you’ll be taking.

Firms offering unregulated advice might make overblown claims about the returns you can expect and downplay the risks to entice interested investors. It could lead to some investors making decisions that aren’t right for them.

Under FCA regulation, authorised crypto firms are likely to provide greater clarity – for example, highlighting when your capital would be at risk – so investors are in a better position to make an informed choice.

3. Regulation could make it easier to spot a scam

The lack of regulation, combined with limited investor understanding of crypto, means it can be an ideal cover for scammers.

According to UK Finance (24 October 2025), the amount of money lost to investment scams soared by 55% in the first half of 2025 to £97.7 million. The organisation noted that investment scams typically include a promise of a high return on items such as cryptoassets.

Being able to check whether a firm is authorised when investing in crypto could help you avoid fraudsters.

For example, the FCA’s Financial Services Register allows you to search firms and individuals – and the activities they have permission for – along with their contact details. So, if you were considering working with a crypto firm or were contacted out of the blue about an investment opportunity, you could quickly check if they are genuine.

Contact us

While regulating crypto offers consumers more protection, it doesn’t mean it’s an appropriate investment for you. If you have any questions about crypto and how it might fit into your financial plan, please contact us.

Please note:

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Cryptoassets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws and are not suitable for the majority of investors.