The Financial Conduct Authority (FCA) of the United Kingdom has announced its intention to implement simplified rules for cryptocurrency companies, acknowledging that existing regulations from the traditional financial market are unsuitable for the crypto industry. In particular, the regulator plans to adapt current legislation to account for the unique characteristics of crypto assets, such as technological specifics and inherent risks.
This is reported by Business • Media
Regulatory Adaptation and Key Exceptions
The FCA’s consultation document discusses the need to create a separate regulatory framework for crypto companies, which will differ from the requirements for banks or investment organizations. As noted by FCA’s Executive Director for Payments and Digital Finance, David Gill, directly transferring principles from the traditional financial sector to the crypto sphere is impractical.
“We operate on the principle that if the risk is the same, then the regulatory outcome should be the same,” he said in an interview with the Financial Times.
However, Gill emphasized that certain aspects of the crypto market differ significantly from traditional financial services. In recent years, UK crypto groups have been required to register with the FCA to comply with anti-money laundering, counter-terrorism financing, and Know Your Customer (KYC) requirements. Now, the regulator is moving towards developing a comprehensive regulatory framework for the crypto asset market.
At the same time, some key FCA principles will not fully apply to crypto platforms. For example, requirements regarding “honesty in business conduct,” “due diligence and care,” or “customer interest orientation” will not be fully enforced. Additionally, crypto companies will face less stringent management, system, and internal control requirements compared to banking or investment structures.
Due to the high volatility of crypto assets, companies will not be required to provide clients with a so-called “cooling-off period” or the right to cancel a transaction. Distributed Ledger Technology (DLT), which operates without intermediaries, will not be considered outsourcing and, accordingly, will not fall under specific risk management requirements.
Enhancing Cyber Resilience and New Requirements
Meanwhile, in the area of operational risks, the regulator plans to tighten rules. Following the recent massive hack of the Bybit wallet amounting to $1.5 billion, the FCA emphasized the need for stringent operational resilience oversight for all companies dealing with crypto assets.
“If you position yourself as a business operating 24/7 but cannot deliver on that promise, it will be a problem,” Gill stressed.
The FCA is also considering the implementation of consumer duty principles, which would require crypto companies to ensure fair conditions for clients and provide them with the right to appeal to the Financial Ombudsman for dispute resolution.
“This is a challenge, but one we have already faced. We must be very clear: this is a high-risk area, and people need to understand that they could lose all their money. At the same time, it is also a growth opportunity,” Gill noted.
Starting January 1, 2026, new rules will come into effect in the United Kingdom requiring crypto companies to report to tax authorities about each user and their transactions. Additionally, the government has already presented a strategy for the digital transformation of financial markets, focusing on the implementation of blockchain technologies.