A panel of experts at the Market Abuse Summit 2025, organized by City & Financial Global in London, discussed the effectiveness of current regulatory treatment of market abuse in the digital assets and crypto markets.

The discussion was moderated by Oliver Tonkin, co-founder and CEO, BCB Group, with a panel including Chen Arad, co-founder & CXO, Solidus, and Laura Navaratnam, UK Policy Lead, Crypto Council for Innovation (CCI).

Tonkin opened the discussion by asking the panelists about the objective of the FCA’s regulatory regime.

Navaratnam said a broad-based regulation was not in place yet, but agreed that things were changing. She said the previous UK government was looking at individual’s tokens, planning bespoke regulatory regimes for each token. But under the current government the plan is to regulate all crypto together. She also referred to a relevant market abuse paper which was published before Christmas.

“The FCA is trying to achieve some level of parity with traditional markets. But crypto is different due to its decentralized market and unknown issuers,” Laura said.

The moderator then asked if a market abuse regime was workable in terms of global crypto market.

Arad answered by agreeing that digital assets were different. For instance, 24/7 trading wasn’t common in traditional markets, but happened on crypto exchanges. “Anyone can start a crypto exchange anywhere in the world and start trading. This creates a very different reality.”

Challenges

The panel highlighted a fundamental infrastructure challenge around crypto markets, which is the fact that, unlike traditional assets, digital assets are not native to one specific exchange.

“Bitcoin will never be only traded in one place. Digital assets are created in a permissionless world. No one can really limit them,” Arad said.

Another challenge, according to the panel, was that only 10% of trading in digital assets happened on chain. The rest happened off the chain. Prices are formed in both places. “The fundamental challenge is that when it happens off chain then its difficult to detect market abuse,” Arad added. But the panelists agreed that in the past two or three years we had started to see regulatory regimes being introduced, even for off chain trading.

They also highlighted the fact that the FCA had an advantage, in the sense that it can see what worked in other places and what didn’t work, and could therefore make informed decisions.

“The FCA is trying to achieve some level of parity with traditional markets. But crypto is different due to its decentralized market and unknown issuers.”

Laura Navaratnam, UK Policy Lead, Crypto Council for Innovation (CCI)

The moderator stayed on the theme and asked the panel how big the off-chain trading challenge was.

Navaratnam said it was a challenge as tokens were being issued in different places and can be traded by someone who is not the issuer. “Traditionally, you should not be issuing a USD-backed token the same way as a meme coin. But that is up to the exchange to decide whether they want to take the risk or not.”

Arad accepted that there were a lot of challenges around digital trading, but called upon the audience to recognize that traditional market regulation didn’t have all these answers to digital issues either. “Market abuse such as insider trading happens elsewhere too. Digital markets also provide a massive opportunity to work together,” he insisted.

Global interaction

The discussion then moved on to the subject of global interaction for digital assets trading and regulation. The moderator asked the panel how the UK could engage with other jurisdictions to make sure things worked.

Navaratnam answered by saying it was important to have a clear idea about what is required during initial enlisting documentation. It was also important to know if there will be ongoing update requirements. She also confirmed that discussions on national storage mechanisms were taking place.

“There are ways to make it more streamlined and practical. There has to be a balance. Tokens can always be issued and those issuers can operate from another jurisdiction. How do we make sure tokens we want are listed properly on a regulated market?” she asked.

“Bitcoin will never be only traded in one place. Digital assets are created in a permissionaless world. No one can really limit them.”

Chen Arad, Co-founder & CXO, Solidus

She summed up by saying investors cannot tell the difference between fraudulent tokens and proper ones without proper enlisting documentation and other relevant information.

The moderator wondered whether the onus was on exchanges themselves to comply with existing requirements. The panel agreed by saying exchanges should be able to provide certain information. They said if a crypto asset was being listed on an exchange then the lister should know what was required of them.

The panel insisted that, for the purpose of market integrity and consumer protections, certain documents were needed, and that sometimes those documents could be very different.

Enforcement

The moderator then asked the panel what enforcement action looked like in practice in terms of digital market abuse.

Arad insisted that, despite all the challenges around digital assets trading, law enforcement agencies believed that blockchain was something that can really be helpful. “The Bitfinex scandal was a good example where the judge specifically praised the blockchain transaction data which helped the court in reaching a decision,” he said.

Arad added that it was important regulators don’t just look at trading activity, but look at transactions too. “You can bring a huge amount of expertise from traditional markets and use it in digital markets.”

The panel agreed that technological advancement and inventions made it possible to cut through the noise and see straight if there was any sign of market abuse. And while a lot of abuse can go undetected in traditional markets too, in digital one can use data signals and understand behaviors, sentiments and social impact.

Navaratnam referred to the importance of token classification in order to make it easier to detect misconduct and take regulatory action in digital assets markets. She said, compared to 18 months ago, the FCA was in a better position to operate in digital markets the same way it does in traditional markets.

“They have achieved this through more market engagement, more skills have been brought in. They do quarterly roundtables, asking the industry to tell regulators what they are doing,” she said.

She concluded by saying that, despite the huge number of firms the FCA had to regulate, there was still opportunity for the UK, and that it was catching up and making sure it regulated in a safe way so that investors didn’t go to other jurisdictions.

“The role of the regulator is not to be the smartest person in the room but to make policy and do the right thing at the right time,” she said.