Crypto firms in the UK will have to follow new, big rules

Companies that work with crypto money in the UK must now show they can manage difficult times. They will also need to keep money ready for risky investments. This is because of new, important rules from the Financial Conduct Authority (FCA).

These rules will mean more checks for the crypto business. Before, there were not many rules for this growing area, even though it became popular. Many people started using crypto after seeing it on social media.

A leader at the FCA, David Geale, said that for the first time, there is a full set of rules for crypto in the UK. These rules cover how companies trade, keep money safe, help customers, and manage risks.

These new rules will start in October next year. They use the same main ideas that are used for other financial services. This means if there is a similar risk, the FCA wants the same result from the rules.

Companies must have enough money saved to help cover any losses from risky things they own. They will also need to do tests every year to show they can handle big problems in the market.

However, crypto companies can decide how much risk they take. This will decide how much money they need to keep safe. Unlike big banks, crypto companies will do their own tests each year and show them to the FCA.

The FCA has also made the amount of money needed for some crypto assets smaller. This happened after the industry gave feedback. But the rules do not completely stop risks for people. People can still lose all their money when they invest in crypto.

FCA bosses hope that more checks will stop bad actions and unfair business that have cost people money. Mr Geale said the new rules should help the crypto business to grow safely.