- The UK FCA proposes easing four core rules for crypto firms while emphasizing strong operational safeguards.
- The regulator cites the $1.5 billion Bybit hack to justify tougher cyber-resilience requirements despite lighter conduct principles.
- Crypto ownership in the UK reaches 12%; the FCA requests feedback by 12 November on the new regulatory framework.
The UK financial regulator has published proposals that could change how cryptocurrency firms operate in the country.
The Financial Conduct Authority (FCA) said on Wednesday that crypto firms might be exempted from four key principles that currently apply to financial services firms.
Those rules typically require firms to act with integrity, skill and care, to take customers’ interests into account, and to ensure that any advice or discretionary decisions made for clients are suitable.
The FCA consultation comes as the UK positions itself as a major player in the global digital asset sector, after indicating in April that it would work with the United States on a coordinated approach.
FCA proposes easing four core principles for crypto sector
The FCA said it is considering removing four specific obligations for crypto brokers and similar firms.
These proposed changes would affect requirements that firms run their business with integrity, act with due skill and care, have regard to customers’ interests, and ensure suitability of advice or discretionary choices made on behalf of clients.
While acknowledging that crypto assets remain volatile and risky, the regulator said the new framework is intended to help firms meet consistent standards without unnecessarily stifling competition.
The FCA stressed that the adjustments are aimed at supporting growth in the UK crypto industry while preserving trust and market stability.
At the same time, it underlined that crypto assets remain high-risk and that consumers must continue to be protected from poor trading practices.
Tougher rules for operational risk after $1.5 billion hack
Although the FCA proposes easing some conduct principles, it recommends stricter measures on operational risk and cyber resilience.
This move follows a $1.5 billion hack of Bybit, a Dubai-based exchange, in February — an incident the regulator cited to illustrate the need for “strong operational resilience controls.”
The FCA expects firms to ensure they have systems capable of withstanding cyberattacks and operational failures, risks that increase as digital asset markets expand.
The consultation also asks whether customers should have access to the Financial Ombudsman Service for disputes with crypto asset firms, offering a potential route to compensation when problems arise.
Additionally, the FCA seeks feedback on whether the consumer duty — which requires firms to put customers’ interests first — should apply in this market.
Rising crypto ownership in the UK
Crypto ownership has grown markedly in the UK in recent years.
Government data show that roughly 12% of adults have held or currently hold cryptocurrencies like Bitcoin or Ethereum, up from just 4% in 2021.
This rapid increase highlights the need for a regulatory framework that both protects consumers and allows the industry to expand in a competitive global environment.
The FCA is inviting responses to its proposals by 12 November.
Any final rules are likely to shape how the UK balances consumer protection with the ambition to build a sustainable and competitive digital assets sector.