The U.K.’s Financial Conduct Authority (FCA) has plans to waive some of its rules for cryptocurrency companies, according to a Financial Times (FT) report on Wednesday.
However, in another areas the FCA intends to tighten the rules where they pertain to industry-specific risks, such as cyber attacks.
The financial watchdog wishes to adapt its existing rules for financial service companies to the unique nature of cryptoassets, the FT reported, citing a consultation paper published Wednesday.
“You have to recognize that some of these things are very different,” David Geale, the FCA’s executive director for payments and digital finance, said in an interview, according to the report, adding that a “lift and drop” of existing traditional finance rules would not be effective with crypto.
One such area that may be handled differently is the stipulation that a firm “must conduct its business with integrity” and “pay due regard to the interest of its customers and treat them fairly.”
Crypto companies would be given less strict requirements than banks or investment platforms on rules concerning senior managers, systems and controls, as cryptocurrency firms “do not typically pose the same level of systemic risk,” the FCA said.
Firms would also not have to offer customers a cooling off period due to the voltatile nature of crypto prices, nor would technology be classed as an outsourcing arrangement requiring extra risk management. This is because blockchain technology is often permissionless, meaning anyone can participate without the input of an intermediary.
Other areas of crypto regulation remain undecided.
The FCA has plans to fully integrate cryptocurrency into its regulatory framework from 2026.