UK Targets Crypto Exchanges With New Rules as Adoption Triples to 12%

As crypto adoption surges in the UK, the government has introduced draft legislation seeking to tighten oversight of crypto firms while keeping Britain attractive to investors and innovators.

The announcement, made by Chancellor Rachel Reeves at a London fintech summit, could mark a turning point in how the UK approaches digital assets like Bitcoin and Ethereum.

“Through our Plan for Change, we are making Britain the best place in the world to innovate and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of fintech, and protect people across the UK,” Rachel Reeves, Chancellor of the Exchequer, commented.

A New Regulatory Era for Crypto in the UK

With ownership of crypto assets among UK adults rising from 4% in 2021 to 12% in 2024, the government sees an urgent need to protect consumers from fraud and instability.

Under the proposed rules, crypto exchanges, dealers, and agents serving UK customers would need to meet the standards on transparency, consumer protection, and operational resilience, aligning them more closely with traditional financial institutions.

The Financial Conduct Authority’s research has also highlighted the risks. As more people get involved in crypto, many remain unaware of the dangers, and some have already fallen victim to scams. The proposed legislation places consumer safety at the heart of crypto regulation.

In parallel, Reeves disclosed that the UK and the U.S. are engaging more closely on digital assets. The two countries will continue talks through the UK-U.S. Financial Regulatory Working Group.

They are also exploring deeper collaboration on digital securities, including a proposed “transatlantic sandbox” championed by U.S. SEC Commissioner Hester Peirce.

Fintech Growth Strategy

That sandbox could allow innovators on both sides of the Atlantic to test products under aligned, cross-border regulatory conditions, potentially transforming fintech's global development.

Beyond crypto, the government plans to launch the Financial Services Growth and Competitiveness Strategy on July 15. It will include measures to support long-term growth in financial services, with fintech highlighted as a priority. The final version of the crypto legislation will be released after the industry responds to the draft.

The move underscores the UK’s ambition to become a global hub for digital asset technologies while enforcing guardrails to prevent abuse.

Early this year, the UK Treasury amended its regulations to separate blockchain validation activities, such as cryptocurrency staking, from collective investment schemes, offering a clearer regulatory guidance for the digital asset industry.