UK FCA Seeks Views on Applying Consumer Duty to Crypto, Possible Implications for Coinbase

• FCA proposes Consumer Duty may extend to crypto firms

• Proposals include operational resilience, financial crime controls, and complaint handling aligned with existing financial rules.

• Consultation follows Treasury draft legislation and signals closer UK–US regulatory cooperation; industry feedback is invited.

FCA Consumer Duty crypto consultation: UK regulator proposes applying Consumer Duty to crypto firms to protect consumers—read how it affects exchanges and investors.

Published: 2025-09-17 | Updated: 2025-09-17 | Author: COINOTAG

What is FCA Consumer Duty for crypto?

FCA Consumer Duty crypto is a proposed extension of the UK regulator’s rule requiring firms to deliver good consumer outcomes, aimed at ensuring crypto firms meet clear standards on disclosure, fair treatment, and risk controls. The consultation sets minimum expectations while acknowledging market innovation and risks.

How would UK crypto firms be affected by these proposals?

The FCA’s consultation outlines requirements similar to those for banks and investment firms: operational resilience, anti-money laundering controls, and clear consumer communications. The regulator is also seeking views on complaint handling, including whether crypto disputes should be eligible for the Financial Ombudsman Service.

David Geale, FCA executive director of payments and digital finance, is quoted emphasizing the balance between fostering innovation and ensuring market integrity. The Treasury’s April draft legislation provides the legal basis for bringing exchanges, dealers and agents within scope.

Why is the FCA proposing Consumer Duty for crypto?

The FCA aims to ensure consumers have clear expectations across financial services, including crypto. The goal is to reduce harm from poor disclosures, weak controls, and opaque products while enabling firms to innovate under consistent rules.

What specific areas does the consultation target?

• Consumer outcomes: clearer disclosures and fair treatment standards for investors and retail customers.
• Operational resilience: fault tolerance and incident management similar to existing financial services norms.
• Financial crime controls: stronger AML/KYC, transaction monitoring, and sanctions compliance.
• Complaints and redress: whether crypto complaints can be referred to the Financial Ombudsman Service.

Frequently Asked Questions

Will Consumer Duty make crypto investing safer for retail users?

Applying Consumer Duty would set baseline expectations for disclosures and conduct, improving transparency and potentially reducing avoidable consumer harm. It does not remove market risk but raises standards for firm behaviour and information delivery.

How can crypto firms prepare for potential Consumer Duty requirements?

Firms should audit customer communications, strengthen operational resilience plans, enhance AML controls, and establish clear complaint procedures that can scale. Early engagement with the FCA consultation will help shape practicable industry standards.

How should stakeholders respond to the consultation?

Industry participants should provide evidence-based feedback highlighting operational impacts, consumer protection benefits, and cost considerations. The FCA expects submissions that balance practical implementation with robust consumer safeguards.

What does international coordination look like?

The consultation comes amid increased UK–US dialogue on digital assets. Policymakers are exploring cooperation to address cross-border risks and align standards for exchanges, custodians, and intermediaries to prevent regulatory arbitrage.

Key Takeaways

• Regulatory scope: The FCA is testing whether Consumer Duty should apply to crypto firms across the value chain.
• Practical focus: Emphasis on disclosures, resilience, AML, and complaint handling to protect consumers.
• Next steps: Industry responses to the consultation will shape final rules; firms should begin preparedness work now.

Conclusion

The FCA’s consultation signals a move to bring crypto firms under existing consumer-outcome rules while weighing innovation and market integrity. Stakeholders should engage with the proposals, strengthen controls, and prepare complaint processes to align with anticipated Consumer Duty expectations.

Author: COINOTAG — Report compiled from the FCA consultation paper and UK Treasury draft legislation released in April; press outlets (Financial Times) also reported related intergovernmental discussions. For internal reference: en.coinotag.com/article/fca-consumer-duty-crypto