The FCA
crypto regime.

Right now, the FCA's oversight of crypto is limited. Since January 2020, crypto firms operating in the UK must register with the FCA under the Money Laundering Regulations. This is an anti-money-laundering (AML) check. It does not assess whether a firm is financially sound, treats customers fairly, or has proper systems in place.

The FCA also banned the sale of crypto derivatives and exchange-traded notes to retail consumers in January 2021. And since October 2023, crypto marketing must comply with financial promotion rules — the same standards applied to investment advertising.

But the core activity — buying and selling crypto on an exchange — is not regulated in the way that stockbroking or banking is. If an exchange collapses, the Financial Services Compensation Scheme does not cover your losses. That is what the new regime intends to change.

Trading platforms. Crypto exchanges operating in the UK will need full FCA authorisation. This means capital requirements, operational resilience standards, governance expectations, and ongoing supervisory oversight. The current AML registration becomes a baseline, not the ceiling.

Custody. Firms that hold crypto on behalf of customers will face specific rules around asset segregation, security standards, and disclosure. The goal is to prevent a repeat of situations where customer assets were commingled with company funds.

Stablecoins. Fiat-backed stablecoins used for payment in the UK will be regulated as a distinct category. Issuers will need to maintain adequate reserves and provide transparency about what backs each token.

Staking services. Platforms offering staking to UK customers will be brought within the regulatory perimeter. This includes disclosure of risks, lock-up terms, and the basis on which yields are advertised.

Market abuse.The regime will introduce rules against insider trading and market manipulation in crypto markets — rules that currently exist for equities and bonds but not for digital assets.

November 2023. HM Treasury published its consultation response confirming the UK would create a bespoke regulatory regime for crypto, rather than fitting digital assets into existing frameworks.

2024–2025. Detailed policy papers and draft legislation. The FCA published discussion papers on trading platform standards, custody rules, and stablecoin requirements.

September 2026. The application window opens. Crypto firms can begin applying for full FCA authorisation under the new regime. Firms already registered for AML will have a transitional pathway.

October 2027. The full regime goes live. From this date, operating a crypto trading platform, custody service, or stablecoin issuance in the UK without FCA authorisation will be a criminal offence.

More protection, eventually. Once the regime is live, exchanges will be held to standards similar to those applied to stockbrokers. Asset segregation means your crypto should be identifiable as yours even if the platform fails.

Fewer platforms. Some exchanges will choose not to apply for UK authorisation. The market will consolidate around firms willing to meet the regulatory bar. That means fewer choices but higher average quality.

DeFi remains outside. The new regime focuses on centralised intermediaries. Decentralised protocols with no identifiable operator are difficult to regulate and are not covered in the initial framework. If you use DeFi, you remain unprotected.

No action needed now. If you are using an FCA-registered exchange today, continue as normal. The transition will be managed by the exchanges themselves. Watch for communications from your platform as the 2026 application window approaches.