Crypto firms operating in UK to be subject to sweeping new rules

Crypto firms operating in the UK will be forced to prove they can weather market shocks and hold capital against risky assets as part of sweeping new rules announced by the Financial Conduct Authority (FCA). The regulations will increase supervision of the crypto industry, which has so far has faced minimal oversight despite a boom in popularity linked to social media influencers and a legitimisation drive under the US president, Donald Trump. David Geale, the FCA’s executive director in charge of payments and digital finance, said: “For the first time, we’ve got a comprehensive regulatory framework for crypto in the UK, one that covers how firms trade, how they hold assets, serve consumers and manage risk.” He said the package of regulations, which will come into force in October next year, “applies the same core principles we use across financial services. So where we see the same risk … we’re looking for the same regulatory outcomes.” That includes requiring firms to meet capital requirements – meaning they have to build up a financial cushion to help absorb losses linked to risky assets on their balance sheets. Companies will also have to conduct annual stress tests, showing they could withstand major market shocks and economic strain. …