Cardano, Avalanche, Sui and IOTA Unite: Major Crypto Players Submit Joint UK Regulatory Response
Four of crypto's biggest names just threw their weight behind a single rulebook.
The Alliance Forms
Forget going it alone. Cardano, Avalanche, Sui, and IOTA—blockchains known for their distinct technical architectures—have bridged their differences to present a unified front to UK policymakers. This coordinated move signals a maturing industry that's tired of regulatory whiplash and seeks clarity above all else.
Why a Joint Voice Matters
Individual submissions get lost in the noise. A consolidated response from projects representing billions in market cap and millions of users carries undeniable heft. It tells regulators that core technical communities agree on foundational principles, cutting through the typical lobbyist fog. The message is clear: we're building the future of finance, and we need rules that don't stifle it.
The UK's Crossroads
London aims to become a global crypto hub, but its rule-making process has been a slow burn. This joint submission acts as a catalyst, offering a blueprint that balances innovation with consumer protection. It's a direct play to shape policy before it's set in stone—bypassing the usual bureaucratic drift.
A New Playbook for Advocacy
Watch for this to set a precedent. Other ecosystems may soon follow suit, forming coalitions to amplify their influence. In the high-stakes game of regulation, speaking with one voice is the smartest bet on the table—something traditional finance houses learned centuries ago, usually over a glass of sherry.
The ball is now in the UK's court. Will it embrace this collaborative framework, or deliver another masterpiece of well-intentioned confusion? The industry has laid its cards on the table; the regulators must now decide if they're playing the same game.
Cardano, Avalanche, Sui And IOTA Warn Against Overregulation
The open letter expands that into a broader architecture: “A consistent theme across our feedback on both staking and decentralized finance is the importance of clearly distinguishing between infrastructure functions and intermediary functions. We recommend that regulatory obligations remain focused on entities that exercise custody, discretion, or commercial intermediation, while preserving the neutrality of public blockchain infrastructure.”
The letter adds that developers and infrastructure providers should be exempted: “[They] deliver software development, validation, communications, or other protocol-level services without controlling client assets or exercising unilateral decision-making are performing infrastructure roles rather than financial intermediation, and warrant a proportionate and differentiated regulatory treatment.”
That distinction matters, the group argues, because staking and DeFi aren’t single business models. They sit on a spectrum from fully custodial services where a firm safeguards assets and intermediates execution to protocol-native activity where users retain control of keys and assets.
On staking, IOTA’s X thread distilled the policy ask into a binary: “regulation must clearly distinguish custodial vs non-custodial/models.” It adds that custodial staking “where firms safeguard assets” warrants “appropriate retail disclosures, consent + record-keeping,” while “non-custodial/protocol-level staking (no control of user assets/keys) should not be swept into the same regime.”
The letter mirrors that framing and narrows it to where the risk sits: “Where staking is provided through a custodial arrangement, and the firm safeguards client assets and intermediates the staking process, we recommend applying the proposed requirements on information provision, key contractual terms, express prior consent for retail clients, and record-keeping.”
It then draws the line the signatories want the FCA to adopt: “For non-custodial and delegated staking arrangements, where firms do not control client assets or private keys, we recommend that such activities remain outside the scope of regulated staking activity, as this maintains proportionality and aligns regulatory obligations with the actual sources of risk.”
The second pressure point is the FCA’s concept of a “clear controlling person” in DeFi. IOTA’s post argues the term needs a “technical, objective definition,” warning that obligations should scale with “custody, discretion, and unilateral control; not with writing code, participating in governance, or providing neutral infrastructure.”
The open letter keeps the same structure: it accepts the FCA’s intent to capture cases where an identifiable party is “effectively carrying on regulated cryptoasset activities,” but pushes back on triggering regulatory status based on development and infrastructure. Instead, it urges the FCA to anchor expectations to “demonstrable, unilateral control over protocol operation, governance or economic outcomes,” particularly because DeFi “rel[ies] on self-custody, automated execution and open participation.”
IOTA positioned the argument as pro-scope, not anti-rules: “smarter scoping = better consumer protection where risk is real, plus legal certainty that keeps non-custodial innovation from being regulated out of existence.” The letter closes on the same trade-off: obligations tied to “custody, discretion and unilateral control” would, the group says, “strengthen legal certainty, enhance consumer protection where it is most needed, and reinforce the UK’s position as a jurisdiction that understands the architectural realities of decentralized technologies.”
At press time, Cardano traded at $0.264.
