Britain’s financial watchdog wants feedback. The Financial Conduct Authority dropped new crypto rules proposals and gave firms until April to respond before the market gateway opens in September 2026.
The FCA laid out how Consumer Duty standards will hit crypto companies alongside conduct rules, complaint systems, and safeguarding requirements. Officials want a trustworthy crypto market but won’t kill innovation in the process. Risk stays part of the game – the agency just wants informed investment decisions rather than pretending dangers don’t exist. Mills from the FCA said back in January: “Our goal is to create a regulatory environment where consumers are protected and innovation is not stifled.”
Crypto stays mostly unregulated right now.
The consultation covers several big areas that’ll reshape how firms operate. Consumer Duty rules mean crypto companies must deliver good outcomes for regular customers – no more treating retail investors like gambling addicts. Redress systems will streamline complaint handling so customers can actually get help when things go wrong. Conduct of Business Standards will force transparency and fairness into crypto activities that have been pretty much the Wild West until now.
Credit risk rules will control how much borrowed money people can throw at Bitcoin and other digital assets. The FCA also wants training standards so crypto managers actually know what they’re doing instead of winging it.
Not just paperwork either.
The Senior Managers regime will rope crypto firms into existing frameworks that work for traditional banks. Regulatory reporting requirements will let the FCA monitor risks and catch problems before they explode. Safeguarding rules will cover firms juggling multiple crypto activities, with specific guidance on custody of investment cryptoassets that customers trust companies to hold safely.
Retail collateral rules in crypto borrowing will protect regular people from getting wiped out when markets crash. Location policies will clarify where crypto firms need to set up shop so regulators can actually oversee them effectively rather than chasing shadows across different jurisdictions.
The consultation period closes April 30, 2026. During these months, the FCA wants detailed feedback from industry players, consumer groups, and anyone else with skin in the game. Mills emphasized the collaborative approach: “We want to ensure that firms are prepared for the upcoming regulatory changes.”
International crypto firms better pay attention too. The FCA wants feedback on how rules will apply to companies operating across borders. Officials aim to align with global standards while tackling unique challenges that come with cross-border crypto operations – basically trying to regulate something that doesn’t respect national boundaries.
Recent crypto failures made clear rules more urgent. High-profile collapses in the past year sparked calls for tighter oversight after investors lost billions when platforms went belly-up. The FCA’s proactive stance targets these vulnerabilities by forcing firms to meet robust conduct and operational standards.
Charles Randell, FCA Chair, talked international cooperation on February 1: “International collaboration is essential to manage the cross-border nature of cryptoassets and mitigate risks associated with regulatory arbitrage.” Translation: regulators want to stop crypto firms from shopping around for the easiest rules.
Consumer groups jumped on board fast. The Consumer Financial Protection Bureau backed the FCA’s efforts on February 2, calling for strong consumer protection measures given recent market volatility. They plan detailed feedback to keep consumer interests front and center in final rules.
CryptoUK trade association announced active participation on February 3. Ian Taylor, their Executive Director, said the group aims to represent industry perspectives while working with regulators on “a sustainable and innovative market environment.” Industry wants input before rules get carved in stone.
The FCA released a detailed report February 1 about safeguarding consumer interests. Officials emphasized crypto’s growing influence in finance and risks if left unchecked. The proposals aim for balance between consumer protection and market innovation – basically trying to have their cake and eat it too.
September 2026 deadline approaches fast. Crypto firms need to prep for regulatory changes because compliance won’t be optional once rules kick in. The FCA made clear that firms should review current practices and make adjustments to align with upcoming requirements. Proactive preparation matters for maintaining market integrity and consumer trust.
The consultation follows December’s regulatory framework release that paralleled traditional finance rules. While crypto largely remains unregulated, financial promotions and crime controls already exist as exceptions to the free-for-all approach.
Integration into the Senior Managers and Certification Regime will ensure accountability at management levels within crypto firms. The FCA wants rigorous conduct and governance standards that work in traditional financial sectors applied to crypto companies too.
Britain’s broader legislative push includes draft legislation from January 2026 establishing comprehensive legal frameworks for cryptoassets. The government wants clarity and stability in a market known for volatility and uncertainty – good luck with that given Bitcoin’s track record.
Firms operating internationally face complex compliance requirements. The FCA seeks feedback on cross-border applications while addressing unique challenges posed by global crypto operations that don’t fit neatly into traditional regulatory boxes.
Pending further feedback, proposals await finalization. The consultation continues with no final decisions disclosed yet, but September 2026 remains the hard deadline for market gateway opening.
The European Securities and Markets Authority released parallel guidance in January, creating potential regulatory alignment across major financial centers. ESMA’s framework mirrors several FCA proposals, particularly around consumer protection and operational resilience. France and Germany already implemented similar safeguarding requirements for crypto custody services, while the Netherlands introduced comparable conduct rules last year.
Market participants face a compliance puzzle spanning multiple jurisdictions. Major exchanges like Binance and Coinbase have been restructuring European operations to meet varying national requirements ahead of broader regulatory harmonization. The timing pressure intensifies as firms must simultaneously prepare for UK rules, EU’s Markets in Crypto-Assets regulation, and potential US Securities and Exchange Commission updates expected by late 2026.
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