Consumer duty and cryptoassets - FCA guidance consultation

FCA Consultation

The FCA consultation¹ was issued on January 23, 2026 and proposes guidance in relation to the following:

• how the FCA proposes for its consumer duty regime to apply to firms conducting crypto-related activities that will fall within the scope of the UK regulatory regime from October 25, 2027
• detailed guidance on scope—e.g., the FCA’s views as to when a firm engaged in relevant crypto-related activities will be a “distributor” and/or “manufacturer” for the purposes of the consumer duty regime, with the consequence that relevant rules apply or not; and/or
• detailed guidance on the regime, and on good and poor practice, so firms are clear on FCA expectations—when in final form, this guidance will be very important in practice for in-scope firms to digest and follow.

In terms of next steps, the consultation closes on March 12, 2026. The FCA will then review the responses and issue the guidance in final form, although the precise timing for this is unclear.

Frequently asked questions (FAQ)—Consumer duty and crypto

I deal with retail and am applying for one of the new crypto permissions. Should the consumer duty be a priority in my project?

Yes.

• The consumer duty should be an area of significant focus, both in the project you will be conducting to apply for any relevant new regulatory permissions and in your broader implementation project. The FCA’s comments on good and poor practice are particularly important to note.
• This is consistent with the FCA consultation (GC 26/2), but also its broader messaging, e.g., the FCA is on record as saying that the duty remains an FCA priority, central to its strategic objectives: “Under our strategy for 2025 to 2030, the Consumer Duty … remains a priority for our work to deepen trust, rebalance risk, support growth and improve lives.”²

What does the consumer duty require in this context?

The consumer duty represents a flagship initiative for the FCA, and for regulated UK firms dealing with retail, is now a cornerstone of the UK regulatory regime. A key message: “The Duty sets high standards of consumer protection across financial services, and requires firms to put their customers’ needs first.”³

There are three key layers to bear in mind in this context.

What is required in any given context will depend on how the applicable requirements map onto your business activities. Four key steps:

• identify which consumer duty rules will apply to you given the nature of your crypto-related activities, how these will be conducted, where and with whom
• conduct a gap analysis to compare how you operate now vs what you will need to have in place going forward
• formulate a project plan to “close the gaps” and proceed to implementation; and/or
• ensure you have appropriate governance and monitoring in place.

Are there any particular items I should prioritise in my project work?

Yes.

• Your overall project will essentially break into two strands:
  • what needs to be done to apply for authorisation or (if you are a firm already authorised) make a variation of permission (VoP) application; and/or
  • what needs to be done more generally to ensure you are compliant with the new regulatory regime for crypto when this comes into force in October 2027.
• From a timing perspective, the authorisation or VoP application comes first, so any consumer duty related points relevant to the application should be prioritised.

In terms of how you can or should identify these areas:

• Keep a “look out” for the dedicated application forms that the UK regulators will likely publish for use by firms seeking to apply for the new crypto-related permissions. These are likely to include detailed questions on a firm’s approach to the consumer duty.
• Obtain copies of FCA application forms used for other types of firms to consider what the FCA asks for in those other contexts on the consumer duty—in the absence of the information referred to in the previous bullet, this will be a useful point of reference.

You mention scope—how do I work out if I am in scope of the consumer duty or not for this purpose?

There is a three-step process:

First, determine which specific crypto-related activities you will conduct going forward:⁴

- Issuing qualifying stablecoin in the UK

- Safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets

- Arranging for another person to safeguard qualifying cryptoassets or relevant specified investment cryptoassets

- Operating a qualifying cryptoassets trading platform

- Dealing in qualifying cryptoassets as principal

- Dealing in qualifying cryptoassets as agent

- Arranging (bringing about) deals in qualifying cryptoassets

- Making arrangements with a view to transactions in qualifying cryptoassets

- Qualifying cryptoasset staking

Secondly, look at the FCA rules in PRIN on the scope of the consumer duty regime and the draft FCA guidance in FG 26/2, and determine if (based on what you propose to do, with whom, how and where), you will fall within or outside of the scope of the regime.

• In some cases, this analysis will be straightforward— e.g., if you’re proposing to be a retail intermediary, operating from offices in the UK and arranging deals or dealing as agent or principal with retail.
• In other cases, a firm will need to identify what it wants to do, with whom, where and how, and cross check that against three key terms in the regime (“retail market business”, “distributor” and “manufacturer”) and other rules (e.g., on territorial scope). For example, consider this scenario— an FCA authorised firm designs a particular crypto product falling within the scope of the new crypto regime. Depending on the detailed circumstances, the firm may be a manufacturer for the purposes of the consumer duty regime if it deals with FCA regulated intermediaries, but these “stand in the middle” of a distribution chain with the manufacturer at one end and retail at the other.

Thirdly, double check for any exclusions, exemptions etc (for more on this, see below).

For firms not currently in scope of the FCA consumer duty regime, it is appreciated that the regime is complex. If you are interested in a flow chart and guidance notes, please email your usual A&O contact.

On scope, can you give some examples of exclusions?

Example—The consumer duty will apply to the proposed new Admissions and Disclosures (A&D) regime for UK issued qualifying stablecoins, but the FCA has specifically said it will not apply in relation to other qualifying cryptoassets in the A&D regime.⁵ This will be achieved by a carve out to be added to the definition of “retail market business” in the Glossary to the FCA handbook.

Can you give me some examples of who manufacturers will be in relation to crypto?

Broadly speaking, a manufacturer is a firm that creates, develops, designs, issues, manages, operates or (where relevant) “carries out” a relevant product or service. Examples of manufacturers in the crypto context:

- Example 1—An issuer of qualifying cryptoassets

- Example 2—An issuer of stablecoins

- Example 3—A firm operating a cryptoasset lending and borrowing service

- Example 4—A UK qualifying cryptoasset trading platform or QCATP providing a service of trading on that UK platform

Can a firm be both a manufacturer and a distributor?

Yes.

• Example—If you are a firm that both designs a relevant product or service, and also has a “point of sale” relationship with end retail customers. 

Cheat sheet

For further information, please see our cheat on the draft guidance here.

1 www.fca.org.uk/publications/guidance-consultations/gc26-2-application-consumer-duty-cryptoasset-firms

2 www.fca.org.uk/publications/corporate-documents/consumer-duty-focus-areas

3 www.fca.org.uk/firms/consumer-duty

4 www.fca.org.uk/firms/new-regime-cryptoasset-regulation/fsma-handbook

5 FCA FG 26/2, paragraph 2.16.