- The UK’s Financial Conduct Authority (FCA) proposes relaxing four core rules for crypto firms while emphasizing stronger operational security measures.
- The regulator cites the $1.5 billion Bybit hack to justify tougher cyber-resilience requirements despite the eased principles.
- Cryptocurrency ownership in the UK has reached 12%; the FCA is seeking feedback by 12 November on a new regulatory framework.
The United Kingdom’s financial regulator has published proposals that could reshape how cryptocurrency businesses operate in the country.
The Financial Conduct Authority (FCA) said on Wednesday it is considering exempting crypto firms from four key principles that typically apply across the financial sector.
Those principles normally require firms to act with integrity, to act with skill, care and diligence, to pay due regard to customers’ interests, and to ensure any advice or discretionary decisions are suitable for clients.
The FCA’s consultation appears as the UK positions itself as a significant player in the global digital-assets sector, following signals in April that it would coordinate approaches with the United States.
FCA proposes relaxing four core principles for the crypto sector
The FCA said it is weighing the removal of four specific obligations for crypto trading platforms.
The proposed exemptions relate to requirements for operating with integrity, for acting with skill and care, for prioritizing customers’ interests, and for ensuring that advice or discretionary decisions are appropriate for clients.
While the regulator acknowledged that crypto assets remain volatile and risky, the new framework is intended to help firms meet consistent standards without stifling competition.
The FCA stressed that these adjustments aim to support growth in the UK crypto industry while maintaining confidence and market stability.
At the same time, the regulator emphasized that crypto assets continue to be high-risk and that consumers must still be protected from poor business practices.
Stronger operational risk rules after $1.5 billion hack
Alongside easing some principles, the FCA is proposing stricter measures focused on operational risk.
The move follows a $1.5 billion hack of Dubai-based exchange Bybit in February, which the regulator cited as an example of why “strong operational resilience” is essential.
The FCA wants firms to ensure they have systems and controls capable of withstanding cyberattacks and operational failures, risks that are increasing as digital-asset markets grow.
The consultation also asks whether customers’ access to the Financial Ombudsman Service should be extended to include crypto firms, providing a route to redress when disputes arise.
Additionally, the regulator is seeking views on whether the consumer duty – which requires firms to act in customers’ best interests – should apply to this market.
Rising cryptocurrency ownership in the UK
Cryptocurrency ownership has risen sharply in the UK in recent years.
Government data indicate that around 12% of adults have owned or currently own cryptocurrencies such as Bitcoin or Ethereum, up from just 4% in 2021.
This rapid growth underlines the need for a regulatory framework that both protects consumers and allows the industry to expand in a competitive environment.
The FCA is inviting responses to its proposals by 12 November.
Any final rules are likely to influence how the UK balances consumer protection with its ambition to build a sustainable, competitive digital-asset sector.