Crypto and Consumer Protection: Unpacking the Effect of Recent Regulatory Developments on the UK Market

Demonstrating the impact of regulatory activity on consumer behaviour and market trends is a key benefit of blockchain-based finance. Jurisdictions have the ability to “see” the real-time impact of new rules and understand if they are having their desired impact. As we all await the impact of the Market in Cryptoassets Regulation (MiCA) in Europe, we may learn lessons from the United Kingdom in light of that nation’s recent regulatory developments.

UK Crypto adoption

In November 2024, the UK Financial Conduct Authority (FCA) released a research note indicating that 12% of the UK population own cryptoassets, with an average holding of GBP 1,842, which reflects an upward trend in adoption from 10% in 2022. TRM research corroborated this trend, with the UK ranking #12 within TRM’s Crypto Adoption and Illicit Activity Report 2024, up from #14 in 2023.

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Understanding the impact of UK Consumer Protection Rules

Amidst this continued uptick in crypto adoption, the FCA, in October 2023, introduced new consumer protection measures relating to the promotion of cryptoasset activities into the UK. These measures require persons seeking to communicate cryptoasset “financial promotions” that may have an effect in the UK or to UK consumers to be authorized, either by (1) holding FCA authorization, (2) using an FCA authorised third-party approver of promotions, (3) registering as a cryptoasset business under the Money Laundering Regulations (MLRs), or (4) qualifying for an exemption.

Within the first 24 hours of these measures being live, the FCA issued 146 consumer alerts, flagging entities — including some notable global VASPs — for being in breach.

Through analysis of UK bounce rate adjusted web traffic visits from 2023 and 2024, TRM has identified significant changes in UK consumers’ online behaviour in accessing VASPs.

2023 — UK online visits to VASPs

2024 — UK online visits to VASPs (through end of October)

Binance sees a reduction in visits, likely due to the new regulatory restrictions on UK retail users’ access to that platform. In addition, there appears to be notable changes to HTX volumes, going from being the sixth most-accessed VASP in 2023 with approximately 4.6 million visits, down to 158th in 2024 with approximately 13,000 visits. By contrast, MEXC Global sees a significant increase, from approximately 1.4 million visits in 2023 up to approximately 4.7 million visits in 2024. Notably, the FCA issued a warning to consumers regarding MEXC Global in March 2024.

Overall, we observe a 6% decrease in the number of VASPs visited by UK-based users in 2024. This contraction may well evidence how regulation could eventually lead to greater consolidation in the market.

Recently, the FCA announced a new roadmap for a comprehensive regulatory framework around cryptoassets. As these regimes are implemented, we will likely see further changes to consumer behavior in the UK. Stayed tuned for further analysis from TRM. 

Find out more about the regulations that shaped the crypto policy landscape in 2024 in our latest Global Crypto Policy Review & Outlook 2024/25.

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