The Financial Conduct Authority (FCA) has responded to criticism of its 'overly stringent' regulation of the encryption industry, which it believes could stifle innovation, emphasizing the importance of maintaining strict standards to protect consumers and preserve the integrity of the financial market. Val Smith, the FCA's Director of Payments and Digital Asset, pointed out that relaxing standards could lead to market disruptions. Innovations built on an insecure, unregulated, and untrusted foundation are likely to collapse.