FCA to waive some rules as UK integrates crypto

The UK’s Financial Conduct Authority set out proposals to bring crypto asset firms into a tailored regime from next year, carving out exemptions from parts of its handbook while tightening requirements in areas like operational resilience. The package aims to adapt rules to crypto’s distinct risks without lowering overall standards, ahead of final rules due in 2026.

The regulator’s consultation says a simple lift‑and‑drop of traditional finance rules won’t work for crypto. In practice, several Principles for Businesses would not apply to crypto trading venues (including integrity, due skill and care, and treating customers fairly). Firms would also face lighter requirements than banks and investment firms for senior managers, systems and controls.

Given crypto’s volatility and market structure, platforms would not need to offer cooling‑off or post‑purchase cancellation rights. The FCA also flags the challenges of “permissionless” DLT and notes it will not treat use of that technology as outsourcing, exempting crypto firms from product oversight and governance rules in that context.

In other areas, standards tighten. The proposals emphasise operational risk – IT outages and cyber attacks – and point to this year’s $1.5bn Bybit wallet heist as evidence for stronger resilience across 24/7 platforms. The watchdog warns that if firms cannot run continuously, consumers and markets face unacceptable disruption.

We want to develop a sustainable and competitive crypto sector – balancing innovation, market integrity and trust,

said David Geale, Executive Director for Payments and Digital Finance at the FCA.

He added that the rules will not remove the risks of investing in crypto, but should help firms meet common standards so customers know what to expect.

Open questions remain. The FCA is seeking views on whether Consumer Duty should apply and if crypto users should be able to take complaints to the Financial Ombudsman Service. The consultation follows HM Treasury’s draft legislation published in April 2025. Feedback deadlines run to 15 October (discussion paper) and 12 November 2025 (consultation paper), with the FCA set to publish final rules in 2026.