UK Set to Become “Safe Harbor” for Crypto With New Draft Rules

UK Drafts Comprehensive Crypto Framework, Signaling a Shift Toward Global Leadership in Digital Assets

In a landmark move to solidify its position in the global digital economy, the United Kingdom has introduced a robust regulatory framework for the crypto industry. Unveiled by Finance Minister Rachel Reeves on April 29, 2025, the proposed regime aligns digital assets with existing securities law under the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025.

Source: Mica Crypto Alliance

The UK government is charting a stricter course than the EU’s MiCA, aiming to enforce full financial market compliance rather than a light-touch approach.

Key Features of the Draft Regulation:

• Six new regulated crypto activities, including trading, custody, and staking.

• Full FCA (Financial Conduct Authority) authorization required for crypto exchanges, custodians, and service providers offering these services in the UK.

• Application of traditional financial safeguards:

• Capital requirements

• Governance standards

• Market abuse rules

• Disclosure obligations

• Two-year compliance window for firms to adjust their infrastructure and reporting systems.

Ripple’s Cassie Craddock praising new UK draft rules. Source: Cassie Craddock

Industry Reactions: Net Positive for Innovation and Clarity

Industry leaders are applauding the UK’s efforts:

• Dante Disparte, CSO at Circle, praised the move as a “rules-based leap forward” that can make the UK a “safe harbor” for responsible innovation in crypto.

• Vugar Usi Zade, COO of Bitget, said the draft brings much-needed clarity, especially for foreign firms previously hesitant due to regulatory uncertainty.

“Firms finally get clear definitions of qualifying crypto assets and know exactly which activities need FCA authorization,” Zade stated.