What key regulatory and market shifts are driving the crypto world today? From new UK guidelines on decentralized finance to ongoing debates over privacy tools and steady investment inflows, the sector continues to balance innovation with oversight.
UK Regulator Consults on Crypto Rules for Exchanges, Lending, and DeFi
The United Kingdom’s Financial Conduct Authority (FCA) has launched a series of consultations on proposed rules for digital asset markets, marking the next phase in the government’s effort to establish a comprehensive regulatory framework for crypto assets. The proposals, published across three consultation papers, cover crypto trading platforms, intermediaries, staking, lending and borrowing, market abuse, disclosures, and decentralized finance (DeFi). The FCA stated that consultation responses will be open until February 12, 2026. The regulator emphasized that the proposals aim to support innovation while ensuring consumers understand the risks associated with crypto investment. Regulations should not eliminate risks entirely but ensure participants operate responsibly and transparently. “Our goal is to have a regime that protects consumers, supports innovation and promotes trust,” said David Geale, the FCA’s executive director for payments and digital finance, adding that industry feedback will help shape the final rules. This initiative represents the UK’s push toward full “market structure” rules for crypto, expanding beyond earlier requirements focused on financial promotions and Anti-Money Laundering compliance. The consultations address exchanges, lending, and DeFi, aiming to foster a secure environment for crypto activities in the UK.
Crypto Urges SEC to See Good in Privacy Tools
Crypto industry executives urged the U.S. Securities and Exchange Commission (SEC) to shift its perspective on blockchain privacy tools during its sixth crypto-focused roundtable on Monday, highlighting legitimate applications beyond criminal use. StarkWare general counsel Katherine Kirkpatrick Bos participated in a panel discussion, stressing that users and creators of privacy tools should not be presumed to be “overwhelmed by wrongdoers.” “Why is the assumption that an individual needs to affirmatively prove that they are compliant or they’re using the tool for good, as opposed to it being the other way around?” Bos questioned, advocating for a balanced approach that recognizes the tools’ benefits. In his opening remarks, SEC chair Paul Atkins warned that if “pushed in the wrong direction, crypto could become the most powerful financial surveillance architecture ever invented,” potentially turning it into a “financial panopticon.” He emphasized the need to strike a balance, ensuring Americans can use privacy tools without immediate suspicion. The discussion underscored the importance of privacy in blockchain for everyday users, amid growing concerns over surveillance in financial systems.
Digital Asset ETPs Post Third Straight Week of Net Inflows, Led by US Demand
Crypto exchange-traded products (ETPs) recorded approximately $864 million in inflows last week, according to a report from European digital asset manager CoinShares. The United States led with about $796 million, followed by Germany ($68.6 million) and Canada ($26.8 million), accounting for roughly 98.6% of year-to-date (YTD) inflows into digital asset investment products. Switzerland-listed crypto ETPs saw $41.4 million in weekly outflows, with YTD net flows at $622.4 million. Bitcoin (BTC) investment products attracted $522 million in inflows, while short-Bitcoin products had $1.8 million in net outflows, signaling recovering sentiment. Ether (ETH) saw $338 million in inflows, bringing YTD totals to $13.3 billion, a 148% increase from 2024. Beyond BTC and ETH, Solana (SOL) products recorded $65 million in weekly inflows, with YTD at $3.46 billion—a tenfold rise from last year. XRP products added $46.9 million weekly, accumulating $3.18 billion YTD. Smaller-cap assets showed mixed results: Aave (AAVE) gained $5.9 million, Chainlink (LINK) $4.1 million, while Hyperliquid (HYPE) saw $14.1 million in outflows. This marks the third consecutive week of inflows for crypto ETPs, following $716 million the prior week and $1 billion the week before. YTD, Bitcoin has drawn $27.7 billion, below 2024’s $41 billion, reflecting sustained institutional interest amid market recovery. As these developments unfold, from regulatory consultations shaping DeFi’s future to privacy debates influencing global standards and robust ETF inflows signaling investor confidence, what could this mean for the future of crypto adoption and innovation?
