Mar 2025
The Compliance Trap: Why Rapid Growth Can Lead to Regulatory Failures
Growth at speed brings risks. When compliance fails to keep pace, companies become vulnerable to financial crime, regulatory penalties and reputational damage.
FCA Releases Crypto Asset Research and Regulatory Roadmap
The Financial Conduct Authority (FCA) has published new research on consumer interaction with crypto assets, alongside a roadmap outlining its approach to future regulation. The findings reveal that approximately 12% of adults in the UK now own Crypto!
The roadmap outlines the FCA’s plans for establishing a regulatory framework for crypto assets. A Discussion Paper, due by the end of the year, will address topics such as market abuse and requirements for admission and disclosure on trading platforms. Following this, five additional Discussion Papers and Consultations are planned for 2025, with the final rules expected to go live in 2026. However, the timeline for implementing these rules and details on the authorisation process remain unclear.
Currently, the UK trails the EU in crypto regulation, where Markets in Crypto-Assets Regulation (MiCA) is set to take effect by the end of the year. Alongside MiCA, the Digital Operational Resilience Act (DORA) is also set to shape the European financial ecosystem in 2025, requiring financial entities and critical service providers to strengthen their operational resilience. While MiCA addresses the regulatory framework for crypto, DORA focuses on ensuring financial institutions and their third-party providers can withstand, respond to, and recover from operational disruptions, particularly those involving digital systems. Together, these regulations demonstrate the EU’s proactive approach to enhancing financial stability and innovation.
The introduction of regulation in the UK is a promising development, with the potential to provide greater clarity, establish consistent standards, and bolster consumer trust in the industry. However, it will be essential for the UK to design its regulatory framework in a way that balances innovation with robust oversight and takes into account the unique characteristics of crypto assets compared to traditional financial services.
With the FCA’s regulatory framework evolving and the EU’s MiCA and DORA regulations set to significantly impact the financial ecosystem, Lysis Group is here to help your business adapt and ensure compliance. Please get in touch to discuss how we can support you.
Growth at speed brings risks. When compliance fails to keep pace, companies become vulnerable to financial crime, regulatory penalties and reputational damage.
Financial crime compliance is undergoing a major transformation as regulatory demands, emerging technologies and evolving criminal tactics reshape the landscape.
The FCA published its formal response to the UK Government’s letter, which outlined expectations for fostering growth and innovation in the financial services sector.
