UK announces new crypto regulations for firms
8 reported
The Financial Conduct Authority (FCA) has announced sweeping new rules for crypto firms operating in the UK, requiring them to prove they can weather market shocks and hold capital against risky assets. The regulations, set to come into force in October next year, will increase supervision of the crypto industry, which has faced minimal oversight despite a boom in popularity linked to social media influencers and a legitimisation drive under US President Donald Trump. David Geale, the FCA’s executive director in charge of payments and digital finance, stated that the package applies the same core principles used across financial services. Crypto firms will be required to meet capital requirements and conduct annual stress tests, but they will determine their own risk levels and conduct their own stress tests based on internal assessments. The FCA has also cut the amount of capital required for some crypto assets, such as stablecoins pegged to fiat currency, following industry pushback. The new rules do not completely remove risks to consumers, who are still warned they can lose all their money if they invest in crypto.
What’s reported
Crypto firms in the UK must prove they can weather market shocks and hold capital against risky assets under new FCA rules.
The regulations will increase supervision of the crypto industry, which has faced minimal oversight despite a boom linked to social media influencers and US President Donald Trump.
David Geale, FCA executive director for payments and digital finance, said the framework covers how firms trade, hold assets, serve consumers, and manage risk.
The rules come into force in October next year.
Firms must meet capital requirements and conduct annual stress tests.
Crypto firms will determine their own risk levels and conduct their own stress tests, unlike UK banks which receive specific scenarios from the Bank of England.
The FCA cut capital requirements for some crypto assets, such as stablecoins, following industry pushback.
Consumers are still warned they can lose all their money if they invest in crypto.
Key figures
David Geale, FCA executive director in charge of payments and digital finance
Dan Coatsworth, head of markets at investment platform AJ Bell
Sources: The Guardian
