The FCA’s consultation proposes minimum standards for UK crypto firms—covering operational resilience, anti-financial crime controls, and complaints handling—to align crypto with traditional financial oversight and improve consumer protection while maintaining a proportionate approach to risks.
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Minimum standards include resilience, AML controls, and complaints rules.
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Proposals expand FCA remit to custody, stablecoins, trading platforms and staking.
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Measures are proportionate to crypto’s systemic footprint; stablecoin caps debated (£10k–£20k individuals).
UK crypto regulation: FCA consultation sets minimum standards for firms to boost resilience and protect consumers. Read concise analysis, key takeaways, and next steps.
What are the FCA’s proposed minimum standards for crypto firms?
UK crypto regulation will require firms to meet minimum standards on operational resilience, systems and controls to combat financial crime, and complaints handling. The FCA’s consultation aims to align crypto firms with core expectations applied to traditional financial services while tailoring requirements to the sector’s risk profile.
How will the FCA expand its remit under the proposed rules?
The consultation follows a Treasury draft Statutory Instrument to bring crypto activity under the Financial Services and Markets Act. If enacted, the FCA’s remit would extend beyond promotions and anti-crime measures to include stablecoin issuance, custody of cryptoassets, exchange operations, and staking oversight.
Why does the FCA propose proportional rules for crypto operations?
The FCA proposes lighter requirements in areas such as senior-manager regimes and tech outsourcing where crypto firms pose less systemic risk than banks. At the same time, the regulator wants stricter standards against cyber threats and sector-specific operational risks to protect consumers and market integrity.
How should crypto firms prepare for the new standards?
Firms should assess current controls against the consultation’s core areas—resilience, financial crime, complaints—and create a prioritized remediation plan. Early alignment will reduce transition costs and show regulators credible progress on governance and consumer protections.
What immediate steps can firms take?
- Conduct a gap analysis: Map existing policies to the consultation’s requirements.
- Strengthen AML controls: Enhance customer due diligence and transaction monitoring.
- Improve operational resilience: Test incident response, backups and third‑party dependencies.
- Document complaints processes: Publish clear routes for consumers and record outcomes.
- Board oversight: Ensure senior management is briefed and accountable for implementation.
Frequently Asked Questions
How will stablecoins be affected by the consultation?
Stablecoin issuance is explicitly referenced for regulation. Proposals may include rules on issuance standards, reserves transparency and possible holding caps—as debated previously in regulatory discussions.
Will the FCA require new licensing for exchanges?
The consultation signals an expanded supervisory scope for trading platforms, likely requiring formal permissions or authorisations under the Financial Services and Markets Act once enacted.
Key Takeaways
- Regulatory alignment: The FCA seeks to align crypto firms with traditional financial standards on resilience and conduct.
- Expanded remit: Stablecoins, custody, trading platforms and staking fall under proposed oversight.
- Practical steps: Firms should run gap analyses, prioritise AML and resilience work, and strengthen senior oversight.
Conclusion
The FCA’s consultation marks a significant step in UK crypto regulation, setting minimum standards to improve consumer protection and market integrity. Firms that act now—strengthening AML, resilience and complaints processes—will be better positioned for compliance and competitiveness as rules crystallize. COINOTAG will monitor updates and provide practical guidance as the framework develops.
Published: 2025-09-17 | Updated: 2025-09-17 | Author: COINOTAG
