- The UK’s Financial Conduct Authority (FCA) is proposing to relax four core rules for crypto firms while insisting on robust operational safeguards.
- The regulator cites the $1.5 billion Bybit hack to justify tougher cyber-resilience and operational standards despite softer conduct principles.
- Cryptocurrency ownership in the UK has reached about 12%; the FCA is seeking feedback on the new regulatory framework by 12 November.
The UK financial regulator has published proposals that could change how cryptocurrency businesses operate in the country.
The Financial Conduct Authority (FCA) said on Wednesday that crypto firms could be exempted from four key principles that normally apply to firms offering financial services.
Those principles typically require firms to act with integrity, skill and care, to put clients’ interests first, and to ensure any advice or discretionary decisions are suitable for customers.
The FCA’s consultation comes as the UK positions itself as a major player in the global digital asset sector, and follows earlier signals in April that it would work with the United States toward a coordinated approach.
FCA proposes easing four core principles for the crypto sector
The FCA said it is considering removing four specific obligations for cryptocurrency trading platforms.
These cover requirements that firms must run their business honestly, act prudently and competently, consider customers’ interests, and ensure advice or discretionary decisions made on clients’ behalf are appropriate.
The regulator said that, while crypto assets remain volatile and risky, the new framework aims to help firms meet consistent standards without stifling competition.
It emphasized that the adjustments are intended to support the growth of the UK crypto industry while maintaining market trust and stability.
At the same time, the FCA stressed that crypto assets are high-risk products and consumers must still be protected from poor business practices.
Tougher operational rules after $1.5bn hack
While proposing to relax some conduct principles, the FCA is also putting forward stricter measures to address operational risks.
This move follows the February hack of Dubai-based exchange Bybit, which lost about $1.5 billion—a case the regulator pointed to as evidence for why “strong operational resilience controls” are required.
The FCA wants firms to have systems capable of withstanding cyberattacks and operational failures, risks that have become more frequent as digital asset markets expand.
The consultation document also asks whether access to the Financial Ombudsman Service should be extended to firms dealing in crypto assets, giving customers a route to redress when disputes arise.
Additionally, the FCA is seeking views on whether the consumer duty—an obligation that requires firms to put customers’ interests first—should apply in this market.
Rising number of crypto owners in the UK
The number of cryptocurrency owners in the UK has risen sharply in recent years.
Government data indicate that around 12% of adults have owned or currently own crypto assets such as Bitcoin or Ethereum, up from just 4% in 2021.
This rapid growth underscores the need for a regulatory framework that protects consumers while enabling the industry to expand and remain competitive.
The FCA is asking for feedback on its proposals by 12 November.
Any revised rules are likely to shape how the UK balances consumer protection with ambitions to build a resilient, competitive digital asset sector.