UK FCA to Relax Crypto Rules, Boost Cyber Laws

The U.K. Financial Conduct Authority is set to ease regulations for cryptocurrency firms while strengthening oversight of cyber risks. A consultation paper outlines plans to adapt financial services rules to the unique nature of cryptoassets, diverging from traditional finance frameworks.

David Geale, the FCA's payments and digital finance chief, stressed that crypto requires tailored approaches. "You have to recognize that some of these things are very different," he said, signaling potential adjustments to integrity and customer protection rules.

Crypto companies will face lighter requirements than banks on governance and controls, reflecting their lower systemic risk profile. The regulator will eliminate mandatory cooling-off periods for crypto purchases, acknowledging market volatility.

Blockchain's transparent architecture exempts it from outsourcing risk assessments. However, the FCA will implement stricter cybersecurity measures targeting digital asset vulnerabilities. Full integration of crypto into the regulatory framework is expected by 2026.