UK FCA to Launch New Crypto Regime in 2026 With TradFi Rules Eased, Cybersecurity Tightened
According to the , the UK is set to implement a new regulatory regime for crypto businesses begining January 2026, later than ongoing consultations with the industry.
Under the new proposals, crypto firms, including platforms, asset managers, and custody services, will not be subject to the full suite of banking and investment firm rules. Instead, management and internal control standards will be relaxed to reflect crypto’s lower systemic risk and unique decentralized structure.
According to FCA executive David Geale, “We want to develop a sustainable and competitive crypto sector – balancing innovation, market integrity and trust. Our proposals won’t remove risks, but will assist firms meet common standards so consumers know what to expect”.
These developments come amid for a comprehensive and well-structured framework for cryptocurrency regulation in the UK, aimed at ensuring the country maintains its position as a leader in global finance. The push for stronger regulatory clarity coincides with the intensifying global crypto race, as nations move to establish robust oversight and infrastructure for digital assets.
There have also been recent hints of closer collaboration between the UK and the US in the digital asset sector, specifically in connection with the proposed “” agreement, which aims to foster cross-border innovation and strategic alignment in emerging crypto technologies.
Investor Takeaways
FCA Moves to Ease TradFi Rules to Benefit Crypto Products
Recognizing that crypto does not pose the identical systemic risk as traditional finance, the FCA is set to ease requirements around senior management, operational controls, and oversight for crypto firms. As a result, cooling-off periods and purchase cancellation rights will not apply to crypto products, considering the high volatility and always-on nature of digital assets.
The FCA will not treat blockchain arrangements as outsourcing, . “We aim to cultivate a sustainable and competitive crypto sector that balances innovation with market integrity and trust,” Geale said.
Meanwhile, new rules will be stricter around cybersecurity, operational resilience, and customer protection. Recent hacks, including the incident, have prompted mandatory 24/7 uptime, systems testing, and readiness for service continuity.
To further tighten cybersecurity measures, the FCA is also considering new ESG standards and expanded reporting.
Investor Takeaways
UK’s FCA Approach vs. Global Crypto Standards
The FCA’s and draft regulations align with global moves, such as the rules and OECD’s Cryptoasset Reporting Framework. The has confirmed CARF-based tax reporting for all crypto firms from January 2026, with strict KYC, account verification, and transaction logs.
Firms will face £300 penalties per inaccurate report and must prepare robust compliance. The FCA is viewking until November 2025, with final rules set for rollout in the new year.
This flexible, risk-based regime is aimed at supporting innovation and keeping London a leading crypto hub, while protecting consumers against substandard practices.
