UK’s FCA Grants Temporary Relief for Crypto Firms on Consumer Duty Rules

UK’s FCA Grants Temporary Relief for Crypto Firms on Consumer Duty Rules

On September 21, the UK’s Financial Conduct Authority (FCA) announced that crypto companies will be granted temporary exemptions from consumer duty rules when the sector formally comes under its regulatory oversight in 2026. The consumer duty framework, which requires firms to act in the best interests of customers and maintain strict standards of integrity and diligence, has been a key pillar of UK financial regulation. 

The FCA explained that applying the full suite of consumer duty obligations immediately to crypto firms would be impractical. Many platforms still operate under relatively immature compliance structures, and rushing to meet traditional standards could push firms out of the UK entirely. Instead, the regulator will phase in requirements, allowing crypto businesses time to adapt while still addressing operational risks.

This balancing act reflects the UK’s broader strategy: to encourage innovation while ensuring market integrity. The FCA has been vocal about the dangers of hacks, fraud, and systemic failures—most recently pointing to the $1.5 billion Bybit hack as an example of what must be prevented.

Industry reaction has been mixed. Some welcome the breathing space, while others argue that delaying consumer protections could leave users vulnerable. Still, the policy signals that the UK wants to remain a competitive hub for crypto innovation rather than stifling it through overly rigid regulation.