News

Statutory Instrument on Cryptoassets is laid before Parliament

16 December 2025

On 15 December 2025, the Statutory Instrument on Financial Services and Markets Act 2000 (Cryptoassets) Regulation 2025 (“SI”) was laid before Parliament.

This publication has been eagerly anticipated after strong industry feedback on the draft SI published earlier in April this year. The SI is seen as the first (and a significant) step in the UK’s roll out of its highly anticipated cryptoasset regulatory regime.

The SI sets out a wide range of rules, including the following key themes:

Designated activities regime: certain public offers of cryptoassets and admissions to trading on cryptoasset platforms are designated activities, meaning that firms making such offers must comply with FCA rules when offering cryptoassets to the public (unless exemptions apply). It is important to note that the designated activity regime also applies to firms who are not authorised by the FCA or subject to the UK's usual regulatory regime but are carrying out a designated activity.
Disclosure requirements: certain persons (to be specified by the FCA) must publish a qualifying cryptoasset disclosure document setting out the features of the asset, governance mechanisms, risk and any conflicts of interest.
Liability and compensation: those responsible for disclosure documents will be liable for untrue/misleading statements or omissions in those documents, and investors who suffer losses as a result of relying on this disclosure can claim compensation.
Market abuse framework: cryptoassets will be subject to a market abuse regime like that for traditional investments, meaning that each of the following market abuse offences will apply in relation to qualifying cryptoassets and related instruments: insider dealing, unlawful disclosure of inside information and market manipulation. The SI includes exceptions for these offences. It is also mandated that certain firms implement an insider list and systems to detect and prevent abuse.
Stablecoins: issuing a qualifying stablecoin is recognised as a regulated activity which will require FCA authorisation. As part of this, issuers are subject to disclosure obligations regarding (among other things) the mechanisms used to maintain a stable value (whether through the holding and management of assets and/or the application of algorithms).
FCA powers: the FCA has been granted authority to make designated activity rules, mirroring powers given to them in the markets for traditional investments, such as securities and derivatives.
Transitional provisions: firms that apply for FCA authorisation and are unsuccessful or withdraw their application, or which apply outside of the application window to be specified by the FCA, will be granted a temporary exemption which allows them to perform pre-existing contracts (with the transitional period running for 2 years after the SI commencement date), but such firms must notify the FCA and counterparties of this arrangement as soon as reasonably practicable of its carrying on of such activity and also in the event that it ceases to conduct such activity prior to the 2 year transitional period.

Authored by John Salmon, Lavan Thasarathakumar, Dominic Hill, and James Sharp.

Next steps

Our Digital Assets and Blockchain practice continues to review the SI and will publish a further article outlining key thoughts in further detail in the coming days. As this is an affirmative statutory instrument, the SI will need to be approved by both Houses of Parliament before it becomes law.

The immediate next step is that the SI will be examined by the Joint Committee on Statutory Instruments (the “JCSI”) to ensure the SI is in line with the powers that have been conferred to His Majesty's Treasury by the Act. The JCSI may also raise any other issues identified in the drafting of the SI.

The SI will then be debated in both the House of Commons and the House of Lords before it is approved. Once approved, the SI is ‘made' i.e. formally signed by a minister and published into law, following which the FCA will have powers to draft rules after 21 days – in line with the FCA's cryptoasset roadmap. The full commencement date of the SI is set for 25 October 2027.

If you would like to discuss the SI and its implications for your business, please contact the Hogan Lovells team.