Eunice AI Powers FCA Move Toward Clearer Crypto Risk Reporting

The UK Financial Conduct Authority has selected Eunice AI, a London-based compliance technology company, to trial standardised disclosure templates for crypto assets as part of its regulatory sandbox programme.

The three-year-old startup will test industry-led templates developed with Coinbase, Crypto.com and Kraken. The trial aims to establish consistent disclosure standards across UK crypto platforms before the FCA publishes final rules in 2026.

The move comes as Britain prepares comprehensive regulation for a crypto market valued at £23.2bn, with 24m UK users holding digital assets. The FCA’s approach will determine how one of Europe’s largest crypto markets balances investor protection with industry growth.

What Eunice AI Does

Eunice AI provides artificial intelligence-driven compliance tools for crypto firms. The company processes data from more than 1,500+ sources to deliver token classification, risk monitoring and regulatory disclosure services to exchanges, custodians and financial institutions.

The platform offers over 30 regulatory templates covering requirements across multiple jurisdictions. In early 2025, the company launched a tool enabling crypto firms to generate EU-compliant whitepapers in minutes. Clients include global exchange OKX.

Founded in 2022 by CEO Yi Luo, the company joined industry body CryptoUK in 2023 and has participated in Treasury consultation working groups on UK crypto regulation. One custodian client reportedly used the platform to refresh due diligence on 300 tokens in three months, achieving a 90% cost reduction.

The FCA sandbox admission places the startup at the centre of Britain’s disclosure framework development, though the outcome remains uncertain.

UK Crypto Sector Under Regulatory Pressure

Britain’s crypto market has grown to become the world’s third-largest, with 35% user penetration and £4.2bn in sector investment. Annual growth stands at 18.5%.

That expansion has collided with tightening regulatory oversight. The FCA introduced financial promotions rules in October 2023, requiring crypto firms to provide clear risk warnings, implement 24-hour cooling-off periods and conduct appropriateness assessments before retail investors can purchase digital assets. Full enforcement began in January 2024.

Compliance has been patchy. An FCA review published in August 2024 found “good and poor practices” across the sector, noting some firms “still needed to make significant improvements” compared to other financial services sectors. Non-compliance could affect future authorisation applications under the 2026 regime.

Between October and December 2024, FCA interventions resulted in 3,697 financial promotions being amended or withdrawn. Retail investments, including crypto, accounted for 89% of enforcement actions. The regulator issued 146 alerts on the first day rules took effect. Firms promoting crypto without meeting FCA standards face criminal prosecution, with penalties including unlimited fines and up to two years imprisonment.

Commercial impact has been direct. Luno and PayPal paused UK customers’ ability to purchase certain cryptocurrencies in 2024, citing compliance requirements. Several platforms withdrew from the UK market entirely.

The Disclosure Problem

Current crypto disclosures vary widely in quality and completeness. Whitepapers lack standardisation. Risk warnings, when present, often bury critical information in technical language. Retail investors frequently cannot distinguish legitimate projects from scams.

The templates being tested would create consistent disclosure structures across platforms. Information on token mechanics, liquidity risks, volatility and security vulnerabilities would appear in predictable locations using standardised language.

Eunice AI convened the working group that developed the templates in response to the FCA’s 2024 Admissions and Disclosures Discussion Paper. Collaboration with major exchanges increases the likelihood of industry adoption once 2026 rules arrive.

The sandbox provides a controlled environment where consumers interact with the templates. The FCA will monitor comprehension rates, time spent reviewing disclosures and whether standardisation improves investment decisions. Results will inform policy statements and final rules scheduled for 2026.

Colin Payne, head of innovation at the FCA, said the regulator maintains “a strong track record of helping firms launch products and services that benefit consumers and markets.” The FCA’s regulatory sandbox, launched in 2014, has been replicated by over 95 global regulators.

Previous sandbox participants have struggled to scale solutions beyond testing phases. The question is whether disclosure templates that work in controlled conditions can function in a fragmented, global crypto market.

2026 Regulatory Framework Takes Shape

The disclosure trial forms part of the FCA’s broader crypto roadmap, mapping policy publications leading to final rules in 2026. Coverage includes trading platform requirements, intermediation rules, lending and staking regulations, and prudential considerations for crypto exposures.

The government confirmed in September 2024 that new regulated activities would include operating crypto trading platforms and associated admission-to-trading regimes. The regulatory perimeter currently covers only financial promotions and anti-money laundering requirements. Crypto exchanges face no conduct rules beyond registration under Money Laundering Regulations 2017.

The 2026 framework aims to bring crypto firms under FCA supervision comparable to traditional financial services. Officials stated they intend to engage with industry on draft legal provisions in early 2025, providing firms with preparation time.

Questions remain about regulatory balance. Overly prescriptive rules risk driving firms offshore to lighter-touch jurisdictions. Insufficient oversight leaves consumers vulnerable to fraud and market manipulation. The collapses of FTX, Celsius and Terra Luna demonstrated how quickly crypto markets can destroy retail wealth when governance fails.

The government has signalled ambition to position Britain as a digital finance hub. In August 2024, the FCA lifted its ban on crypto exchange-traded notes for retail investors after four years. In September, ministers confirmed digital assets would receive enhanced legal protection under the Property (Digital Assets Etc.) Bill, formally classifying Bitcoin, NFTs and other holdings as personal property.

These moves suggest a government willing to embrace crypto while demanding higher standards. The Eunice AI sandbox trial represents practical implementation of that approach.

International Regulatory Competition

Britain’s regulatory development occurs alongside international competition for crypto market share. The European Union implemented Markets in Crypto-Assets Regulation from mid-2024, creating unified licensing across member states. MiCA establishes comprehensive rules for public offers, trading and institutional involvement.

France and Germany have benefited from early clarity. The Autorité des Marchés Financiers has drafted supportive technical standards. Deutsche Bank is exploring crypto custody and tokenisation. Boerse Stuttgart Digital developed a fully insured crypto staking service with Munich Re.

The United States remains the world’s largest crypto market, accounting for more than 86% of domestic cryptocurrency market share, with global trading volumes regularly exceeding $140bn per day. However, American regulation has emphasised enforcement over clear rules, creating uncertainty that some firms cite when considering European jurisdictions.

The UK sits between these approaches. The FCA has enforced aggressively, issuing thousands of alerts and interventions. But it has committed to comprehensive rules providing clarity for compliant firms. Whether that balance attracts crypto businesses will become evident as 2026 approaches.

As Europe’s largest crypto economy and the world’s third largest, Britain’s regulatory choices will influence global standards. If the Eunice AI disclosure templates succeed and integrate into 2026 rules, other jurisdictions may adopt similar frameworks, potentially creating international consistency.

Testing Period Begins

Yi Luo said the sandbox “is where regulators and industry participants meet to build the foundations for a safer and smarter digital asset market.” The company will test templates over the coming months, with results feeding into FCA policy development.

For Eunice AI, the trial provides an opportunity to demonstrate that automated compliance tools can handle crypto market complexity at scale. For the FCA, it represents a test of whether standardised disclosures improve consumer decision-making or become another compliance exercise.

The crypto industry seeks regulatory clarity that attracts institutional capital while preserving innovation and accessibility. Major exchanges want rules that eliminate non-compliant operators while avoiding requirements that make UK market participation prohibitively expensive.

The sandbox trial will run through 2025, with findings expected to influence final rules published in 2026. Implementation of Britain’s comprehensive crypto regime will follow rule publication.

Whether standardised disclosure templates can solve crypto’s transparency problem remains an open question. The FCA’s decision to test industry-led solutions through its sandbox represents a pragmatic approach to regulation, prioritising evidence over theory.

As 2026 approaches, the outcome will determine not only how UK consumers understand crypto risk, but whether Britain’s regulatory model can attract global crypto firms while protecting 24m retail investors from the sector’s well-documented risks.