MiCA Crypto Alliance Responds to FCA Discussion Paper on Regulating Cryptoasset Activities
The MiCA Crypto Alliance, together with the UK Centre for Blockchain Technologies (UCL CBT), has submitted a joint response to the Financial Conduct Authority’s Discussion Paper DP25/1 on regulating crypto-asset activities in the UK. The submission combines industry and academic perspectives to support market integrity, consumer protection and responsible innovation.
Our response drew on MiCA implementation, academic research and direct engagement with regulators, focusing on two complex and often misunderstood issues: the classification of decentralised finance (DeFi) and the design of ESG disclosure obligations for crypto markets.
Key points included:
- Decentralisation is not binary. It exists on a spectrum and should be measured using practical methods, such as network theory, to assess how power is distributed across validators, developers and token holders.
- DeFi challenges traditional assumptions. Unlike traditional finance, DeFi lacks central counterparties or providers, meaning existing consumer protection frameworks do not apply neatly.
- ESG should follow the asset, not the platform. Aligning with MiCA’s model ensures a simpler, scalable and decentralised-compatible framework.
- No to static PDFs. ESG disclosures should be web-native, machine-readable and updateable, enabling comparability and usability.
- Interoperability is essential. Divergent UK standards would fragment the landscape and raise compliance costs. Aligning with MiCA and Delegated Regulation 2025/422 supports global consistency.
We welcome the FCA’s consultative approach and its willingness to engage with both technical and academic expertise.
