The UK’s 2025 Crypto Regulatory Overhaul
Why MARC Signals a New Era for Market Integrity and a New Mandate for Compliance Teams
Note: The overview of key regulatory developments was provided by Miroslav Duric of Taylor Wessing. All other commentary and perspectives are from StarCompliance.
The United Kingdom entered 2025 with a clear ambition: to build one of the world’s most comprehensive, supervision-ready regulatory frameworks for cryptoassets with the aim of positioning itself as a global hub for the crypto-industry. In a year marked by coordinated action between HM Treasury, the Financial Conduct Authority (FCA), and Bank of England, the UK has moved decisively to bring crypto within the perimeter of mainstream financial regulation. What is emerging is not the mere replication of the EU’s MiCA model, nor the adoption of the U.S. enforcement-led approach, but a distinctly British approach to the regulation of the crypto-industry that is taking place in different phases, focused on the market integrity, venue accountability, and prudential resilience.
In recent months, the FCA has published a number of consultation papers with the proposed rules and guidance in various areas, that have unveiled the potential pillars of the future UK regulatory framework on cryptoassets. On 16 December 2025, the FCA issued a highly anticipated Consultation seeking feedback on listings for crypto assets, standards for crypto trading platforms, rules for brokers, staking, and most importantly market abuse.
Considering the fundamental differences between traditional securities markets and cryptoasset markets, the FCA has decided not to apply the existing securities market abuse regime to cryptoassets. Instead, the FCA is looking to create a new designated regulatory framework on market abuse (the Market Abuse Regime for Cryptoassets “MARC”) that shall for the first time ensure direct application of insider dealing, market manipulation and disclosure obligations to cryptoassets.
It represents a conceptual shift: crypto markets must now be surveilled with the same rigor as equities, derivatives, and fixed income, but with added complexity (e.g., 24/7 trading, pseudonymous wallets, fragmented liquidity, and on-chain behaviors that have no parallel in traditional finance.
This new reality exposes a major blind spot for financial institutions: most firms still treat crypto employee trading as “out of scope” for market abuse and conflicts monitoring. MARC makes that position untenable.
A Regulatory Timeline That Redefined the Perimeter
The UK’s rapid progression toward regulating crypto activities is unprecedented. Key milestones include:
April 2025:
Draft FSMA Cryptoassets Order
HM Treasury published draft legislation bringing “qualifying cryptoassets” and “qualifying stablecoins” into the category of specified investments. Crypto trading, custody, intermediation, and issuance would now require FCA or PRA authorization.
May 2025:
DP25/1 and Formal Consultations : The FCA released additional discussion papers on the regulation of trading platforms, intermediaries, lending, and staking, and DeFi activities, alongside detailed consultation papers on stablecoin issuance and prudential capital requirements.
Consultation Paper (CP25/14): Stablecoin issuance and cryptoasset custody Proposed rules and guidance for issuing qualifying stablecoins and safeguarding qualifying cryptoassets.
Consultation Paper (CP25/15): A prudential regime for cryptoasset firms Proposed prudential rules for qualifying stablecoin issuers and cryptoasset custodians, introducing the new FCA CRYPTOPRU sourcebook.
September 2025:
Consultation Paper (CP25/25): Application of FCA Handbook for Regulated Cryptoasset Activities. Proposals on how existing rules like the Senior Managers and Certification Regime (SMCR), conduct rules (COBS), financial crime, and the Consumer Duty will apply to the new regulated crypto activities.
December 2025:
Consultation Paper (CP25/40): Regulating cryptoasset activities. Proposed rules and guidance on trading platforms, intermediaries, lending/borrowing, staking, and Decentralized Finance (DeFi)—following up on DP25/1).
Consultation Paper (CP25/41): Regulating cryptoassets: Admissions & disclosures and market abuse regime for cryptoassets. Proposed rules for listing cryptoassets and for preventing market abuse—following up on DP24/4 from late 2024).
Consultation Paper (CP25/42): A prudential regime for cryptoasset firms. The remaining material for the prudential sourcebook, including requirements for cryptoasset firm groups and the K-factor requirement for activities not covered in CP25/15.
Together, these releases outline the architecture of the UK’s future crypto regime: authorization, prudential standards, conduct rules, disclosures, custody requirements, and critically, market abuse controls.
February 2026:
The FCA’s consultation on MARC closes on 12 February 2026, by when industry stakeholders have time to submit their responses to the consultation paper. Following this, the FCA is expected to publish finalized rules by mid-2026 (which is the deadline for all FCA policy statements concerning cryptoassets). Firms that wait will find themselves unprepared at the regulatory gateway.
MARC: The First Comprehensive Market Abuse Regime Built for Crypto
Unlike traditional securities, many cryptoassets lack identifiable issuers, central disclosure channels, or unified trading venues. Rather than forcing crypto into the securities mold, MARC adapts market abuse principles to the realities of blockchain-based assets.
MARC introduces three core prohibitions:
- Insider dealing
- Unlawful disclosure of inside information
- Market manipulation
But MARC adds something new: a requirement that firms have “proportionate on-chain monitoring capabilities.”
This marks the first time a major regulator has explicitly recognized on-chain surveillance as part of a firm’s compliance obligations. In accordance with the latest proposal, large crypto-asset trading platforms (CATPs) operating in the UK (CATPs with over £10 million of average annual revenue over the previous three years) will be required to monitor on-chain activities relevant to their operations. This may include monitoring wallet interactions, token flows, and transaction patterns of their users. Other smaller CATPs as well as entities acting as intermediaries in the sale and purchase of cryptoasset, will be required to maintain proportionate off-chain monitoring capabilities, but will not be required to be equipped with on-chain monitoring systems like large CATPs.
Other key obligations include:
- Implementing systems to prevent, detect, and disrupt abusive activity
- Monitoring employees and insiders across both traditional and digital assets
In addition, same as in the traditional finance space, both the issuers of cryptoassets and cryptoasset service providers will be required to maintain an insider list with the information about all persons with access to inside information related to a cryptoasset.
Notably, in its latest consultation on the future UK crypto regime, the FCA has gone further than most regulators by offering explicit guidance on how “legitimate market practices” should be assessed in the context of market abuse prevention, an area that has historically lacked meaningful regulatory clarity. In particular, the FCA acknowledges that certain activities unique to crypto markets may, when conducted appropriately, fall outside the scope of abusive behavior.
The FCA indicates that coin-burning, when carried out solely for the purpose of reducing the number of tokens in circulation, may be treated as analogous to a share buyback and therefore constitute a legitimate market practice under MARC. Similarly, crypto-stabilization activities may also be permissible, provided they are conducted in a manner comparable to price stabilization in traditional capital markets—namely, for a limited duration, subject to appropriate governance, and supported by clear recordkeeping and public disclosure.
Importantly, the FCA’s proposed Market Abuse Regime for Cryptoassets (MARC) places a greater supervisory burden on firms than is typically seen in traditional markets. Trading venues and intermediaries will be expected to proactively identify, monitor, and address potentially abusive behavior, including activity occurring across decentralized structures or cross-chain environments. This signals a clear expectation that market integrity in crypto will be driven not just by rules, but by robust firm-level surveillance, controls, and accountability.
Where Compliance Is Most Exposed: The Employee Trading Gap
The most profound implication of the UK’s 2025 crypto reforms is one that many firms have not yet acknowledged: MARC brings employee trading in cryptoassets squarely into the realm of market abuse risk.
MARC creates new compliance obligations in five areas:
1. Inside Information Now Includes Crypto
Employees with knowledge of client orders, upcoming token listings, platform decisions, custody incidents, or corporate issuance events will be deemed as holding inside information under MARC.
2. Front-Running Rules Apply to Crypto
If an employee front-runs a large client order in Bitcoin, ETH, or a token listed on a UK trading platform, MARC prohibits it, even if the trade occurs on an overseas exchange.
3. On-Chain Employee Monitoring Becomes Expected
The FCA’s “proportionate on-chain monitoring” language signals that firms deemed as large CATPs, will be required to track not only employees’ trading behavior but also all transactions taking place on their trading venues.
4. Market Manipulation Can Occur On-Chain
Behaviors such as MEV, wash trading, layering, spoofing, or coordinated pump-and-dump campaigns, common in crypto, are explicitly covered by MARC.
5. Insider Lists Must Extend to Crypto Assets
Any employee with access to crypto-related MNPI must be captured on insider lists for affected assets, just as with traditional securities.
With crypto now squarely within the perimeter, the compliance gap becomes clear: Traditional employee trading systems cannot see what employees can easily trade.
A New Compliance Paradigm: Traditional + Digital in a Single Framework
MARC signals a regulatory expectation that firms prevent market abuse in crypto markets with the same rigor used in equities and fixed income. To achieve this, firms must modernize their compliance architecture.
Where traditional systems break down:
- No identifiers (CUSIP/ISIN equivalents) for tokenized or synthetic assets
- No visibility into decentralized trading venues
- No surveillance of cross-chain movement or wallet behavior
- No linkage between employees and on-chain identities
- No tools to assess market manipulation unique to blockchains
- No information barriers
The UK’s 2025 reforms make it clear that market abuse in crypto is still market abuse, and regulators expect firms to act accordingly.
The Strategic Takeaway for Compliance Leaders
The UK’s work in 2025 signals three major shifts:
- Crypto is no longer an “emerging asset class” it is a regulated market.
MARC is the clearest acknowledgment yet that crypto trades, behaviors, and information flows are now subject to the same expectations as traditional securities.
- Compliance obligations extend anywhere employees trade, even offshore or on-chain.
Crypto’s 24/7 nature means the traditional boundaries of venue-based monitoring no longer exist.
- Firms that rely on manual controls or narrow monitoring frameworks will not be ready for the emerging regulatory framework on cryptoassets that is scheduled to be finalized in 2026.
The inability to monitor employee crypto trading, insider access, and on-chain activity will create measurable regulatory exposure.
Conclusion: 2025 Is the Year the UK Set the Standard for Crypto Market Integrity
The work done by the FCA so far, has not merely “updated” crypto rules – it has commenced the construction of a designated market abuse regulatory framework applying directly to cryptoassets. When MARC goes live, cryptoasset firms will be expected to maintain controls that resemble the best of securities regulation plus new capabilities for on-chain surveillance, insider monitoring, and behavioral analysis.
For compliance officers, the message is clear: Crypto can no longer sit outside your surveillance perimeter.
Employee trading, insider access, information barriers, and market behavior must be monitored across both traditional markets and digital networks. The firms that adapt early will be best positioned at the authorization gateway and best protected when regulatory scrutiny intensifies.
Star’s Crypto Dealing & Tokenized Asset Compliance Solutions is purpose-built to give compliance teams the visibility and control they need as digital assets become part of both corporate and employee financial strategies. Schedule a personalized demo here.
Crypto Regulations Decoded
