Consensys criticizes FCA, says UK has lost crypto leadership

• FCA seen as “heavy-handed” in cryptocurrency supervision
• Consensys points to loss of market share for the US
• Sector calls for clear rules and faster regulatory pace

At the Zebu Live event in London, the UK's regulatory environment returned to the forefront of discussion, with executives and lawyers pointing to a lack of clarity and slowness in defining cryptocurrencies. Bill Hughes, senior advisor and director of global regulatory affairs at Consensys, was blunt in criticizing the current approach.

"We believe this has cost the UK dearly, causing it to lose its position to the US as a cryptocurrency hub," deciding that everything cryptocurrency is a financial instrument subject to all applicable rules actually harms the UK's competitiveness.

Consensys operates products such as the MetaMask wallet, the Infura infrastructure, and Linea (Ethereum L2). Despite having a local presence, Hughes stated that the company has not been formally consulted by authorities on policy design. He believes that "putting the sector behind the iron gates of traditional financial regulations" prevents the country from leading the next wave of innovation.

On a panel at the event, representatives from Kraken, Coinbase, and the UKUS Crypto Alliance warned that excessive caution could push companies to other jurisdictions. The FCA's head of innovation, Colin Payne, defended the agency's focus on consumer protection and long-term trust, stating that the regulator "will not apologize for being cautious" after previous market crashes.

“The most glaring difference is between the UK and the US,”

said Hughes.

"While in the US there is a real desire to give blockchain technology room to breathe and advance, the tone in the UK is very different, focusing on risks and uncertainties. We believe that pro-innovation policies will prove to be the most sensible path when all is said and done."

The British government is working on a comprehensive regulatory package, scheduled for implementation in 2026, covering stablecoins, trading platforms, lending, staking, and custody. The recent lifting of the ban on retail crypto ETNs has paved the way for listings in London, although the broader ban on derivatives for retail investors remains in place.

In Parliament, calls for speed are growing. "Cryptocurrencies and digital assets are held by a growing number of UK citizens—more than 8 million people in recent figures. The UK has the potential to be a world leader in this field, supporting our mission for growth," said Gurinder Singh Josan, calling for swift government action.