The UK Financial Conduct Authority (FCA) has granted approval to RegTech firm Eunice to conduct live experiments with standardized crypto disclosure templates alongside leading exchanges, including Coinbase, Crypto.com, and Kraken. This initiative aims to assess market transparency under actual trading conditions, marking a significant step in the development of regulatory frameworks for cryptocurrencies in the UK.
Eunice’s trials, taking place within the FCA’s sandbox, will evaluate whether these standardized disclosure templates can enhance transparency and provide clearer, real-time information for market participants. The program is designed to identify operational challenges, explore potential improvements in automation, and assess how changes in disclosure affect investor decision-making. This practical approach allows the FCA to gather data on the effectiveness of disclosures and evaluate their performance at scale, examining their potential impacts on liquidity and trading efficiency.
These experiments build on insights gained from last year’s Admissions and Disclosures Discussion Paper, which sought industry perspectives to inform initial regulatory frameworks. By testing these ideas in real-world settings, the FCA aims to develop a robust evidence base regarding the effectiveness of various disclosure requirements.
The FCA’s sandbox actively invites participation from companies developing similar solutions, facilitating closer collaboration between industry participants and regulators. This integration allows the FCA to observe actual market behavior and performance metrics before finalizing regulatory guidance. The sandbox also enables experimentation with various reporting frequencies and the development of interactive disclosure dashboards.
This initiative forms part of the FCA’s comprehensive multi-year Crypto Roadmap, which includes recently implemented stricter financial promotion regulations, warnings for unregistered exchanges, and guidance on issues related to admissions, disclosures, and market abuse in digital assets. The overarching goal is to blend regulatory clarity with the flexibility needed for innovation in the crypto space, aiming for completion by 2026.
The FCA’s recent measures indicate a notable shift toward more adaptable regulatory approaches for crypto assets. For instance, retail access to crypto exchange-traded notes was reinstated in August, and a consultation regarding the application of Consumer Duty to crypto products was initiated in September. These sandbox trials, including those by Eunice, yield real-world insights that will significantly influence policy design, moving beyond theoretical assumptions. They will also enable regulators to track technology adoption trends, gather user feedback, and analyze the dynamics between different platforms.
As these experiments progress, the FCA will leverage findings related to disclosure performance, market reactions, and operational implications to inform the development of the UK’s final regulatory framework for cryptocurrencies. The approach reflects a commitment to creating a balanced regulatory environment that both safeguards consumers and supports innovation in the rapidly evolving crypto landscape.
