The U.K.’s Financial Conduct Authority (FCA) is consulting on proposals to set standards in the fledgling crypto sector.
In a new consultation paper, the regulator outlined its latest proposals for establishing minimum standards at crypto firms — such as operational resilience, and systems and controls to combat crime — echoing many of the requirements that already apply to traditional financial firms.
“The standards, if adopted, would help reduce some of the risks prevalent in the business practices in this sector. However, they do not address the underlying and inherent risks posed by crypto assets,” the paper said.
As part of the consultation, the FCA is also seeking feedback on potential investor protections for the crypto sector, such as how its “consumer duty” — which requires financial firms to deliver “good outcomes” for their clients — should apply.
It is also consulting on complaint-handling standards for the sector, and whether protections provided by the Financial Ombudsman Service should apply to complaints involving crypto firms.
“We want to ensure that consumers of crypto asset firms get an appropriate level of protection. While crypto assets are generally high-risk and highly volatile, customers should still be protected from poor business practices,” the regulator said.
The FCA added that it also wants to foster a “well-regulated and competitive market” that will enable sustainable growth and attract investment to the U.K. crypto sector.
With that in mind, the proposals are designed to be flexible and proportionate to keep the U.K. market competitive on the global stage, it said.
“We want to develop a sustainable and competitive crypto sector — balancing innovation, market integrity and trust. Our proposals won’t remove the risks of investing in crypto, but they will help firms meet common standards so consumers have a better idea of what to expect,” said David Geale, executive director of payments and digital finance at the FCA, in a release.
“We are working now on what those standards should look like, ahead of legislation to bring it within our regulation,” he added.
The FCA said it plans to publish its final rules in 2026.
The deadline for responding to the consultation paper is Nov. 12, while the deadline for feedback on consumer duty, complaints and ombudservice is Oct. 15.