The UK’s financial watchdog, the FCA (Financial Conduct Authority), is thinking about letting some crypto companies ignore certain rules designed to protect customers. This comes as the UK tries to become a crypto-friendly hub, similar to what the US is doing.
Easing Up on Crypto Rules?
The FCA has proposed relaxing four key principles for crypto trading platforms: integrity, skill and diligence, prioritizing customer interests, and giving appropriate advice. They say this is about balancing innovation with protecting consumers. While acknowledging the risks of crypto, the FCA believes setting basic standards will help.
Balancing Innovation and Risk
This move follows a big crypto exchange hack earlier this year, highlighting the need for better security. The FCA is pushing for stricter risk management to prevent similar incidents.
They’re also debating whether the “consumer duty” rule (meaning companies must prioritize their customers) should apply to crypto firms. Plus, they’re discussing if crypto customers should be able to use the Financial Ombudsman Service to get compensation if things go wrong. It’s likely the consumer duty will eventually apply as crypto becomes more mainstream.
Growing Crypto Adoption in the UK
Interestingly, more and more Brits are getting into crypto. Around 12% of adults now own or have owned Bitcoin or Ethereum, a big jump from just 4% in 2021.
US-UK Crypto Collaboration
This all comes as the UK and US are talking about working together on crypto regulation. Recent meetings between officials from both countries, including representatives from major crypto companies and banks, suggest a big agreement is in the works. The crypto industry itself pushed for this collaboration.