Millions of UK Adults Invest in Crypto Amid Regulatory Scrutiny

Crypto adoption in the UK continues to surge despite stringent regulatory scrutiny. According to Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), many young Britons invest in crypto assets like Bitcoin instead of traditional assets like equities or bonds.

Rathi stated that millions of Britons under 35 had made their first crypto investment, despite the "very high risk" of losing all their money. 

Growing Crypto Adoption in the UK

In addition, a YouGov survey of nearly 2,200 participants estimated that 12% of UK adults—around 7 million people—own crypto assets, with young men most likely to borrow money to invest. According to data from Statista, the number of crypto users in the UK is anticipated to reach 23.95 million by the end of the year.

However, Rathi expressed concern over this growing trend, emphasizing FCA’s mission to steer citizens toward traditional investments for better long-term returns as part of its new five-year strategy.

As part of this strategy, the financial watchdog aims to increase the proportion of Britons holding over £10,000 in traditional investments by 2030. Direct share ownership in the UK lags behind the US (38%) and Sweden (20%).

“One thing I think is not great is the sheer number of under 35-year-olds for whom the financial product that they invest in first is crypto — several million in the UK — rather than equities or debt or other types of products,” Rathi said.

UK’s Regulatory Scrutiny

The FCA has long been known for its tough stance on crypto, especially towards firms offering crypto-related services. Since introducing its anti-money laundering regulatory regime in 2020, the regulator has only approved around 50 firms out of the 368 applications that wish to offer crypto services.

While the FCA has been criticized for its stringent approach to crypto, the regulator has defended its stance, emphasizing its commitment to preventing financial wrongdoing and ensuring market integrity—even if it stifles innovation.

Meanwhile, the FCA is shifting from its anti-money laundering-focused regulatory approach to a broader authorization regime for crypto firms by 2026. In this regime, crypto firms will face more challenging due diligence and transparency rules before securing registration. FCA-approved exchanges will have to reapply under these stricter rules next year.