UK FCA to Ease Rules for Crypto Firms While Tightening Cybersecurity Oversight
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The U.K.’s Financial Conduct Authority (FCA) is considering easing some of its rules for cryptocurrency companies while tightening oversight in areas tied to industry-specific risks, such as cyberattacks, according to a Financial Times report. The regulator said its framework must adapt to the unique nature of cryptoassets, rather than simply replicating rules applied to traditional finance. David Geale, the FCA’s executive director for payments and digital finance, noted that a “lift and drop” approach from banking regulations would not work for crypto. Instead, the regulator is tailoring requirements, particularly around integrity, customer treatment, and business practices, to reflect the distinct risks and structures of crypto firms. As part of the adjustments, crypto companies would face lighter requirements compared to banks or investment firms in areas like senior management oversight, systems, and internal controls, since they don’t pose the same systemic risks. They would also be exempt from offering cooling-off periods to customers and from treating blockchain infrastructure as outsourcing, given the decentralized and permissionless nature of the technology.