UK crypto regulation

The United Kingdom is part-way through a two-stage change to how cryptoassets are regulated.

The stage in force today began in January 2020, when the Financial Conduct Authority became the anti-money-laundering supervisor for cryptoasset businesses, and was extended in October 2023 when cryptoasset promotions were brought inside the financial promotions regime. Firms register under the money laundering regulations and follow the marketing rules, but there is no conduct authorisation for cryptoasset activity itself.

The second stage creates one. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, SI 2026/102, became law on 4 February 2026 and brings cryptoasset activity inside the Financial Services and Markets Act. The FCA published its final rules on 30 June 2026. Full commencement is 25 October 2027, and firms that want to keep serving UK customers apply in a window that opens on 30 September 2026.

The timeline

What becomes a regulated activity

SI 2026/102 amends the Regulated Activities Order to define three categories of asset: qualifying cryptoassets, qualifying stablecoin as a subset of those, and specified investment cryptoassets. It then specifies activities in relation to them as regulated activities, so carrying one on by way of business without authorisation breaches the general prohibition in section 19 FSMA.

Separately, the instrument creates designated activities under Part 5A FSMA covering public offers of qualifying cryptoassets and admission to trading on a qualifying cryptoasset trading platform, and a market abuse framework for relevant qualifying cryptoassets that defines inside information and market manipulation and prohibits insider dealing.

Where a firm is based

Section 418 FSMA is amended to set when a firm is treated as carrying on an activity in the UK.

For operating a trading platform, dealing as principal, dealing as agent and arranging deals, a firm involved in the sale or subscription of a qualifying cryptoasset to or by a UK consumer needs authorisation whether it is based in Britain or overseas. Where a UK-authorised trading platform or dealer as principal sits between that firm and the UK consumer, the firm does not. Overseas firms serving only UK institutional customers are outside the requirement, provided those customers are not acting as an intermediary to a UK consumer.

For safeguarding and for staking, authorisation is needed where the activity is carried on in the UK or on behalf of a consumer in the UK. For stablecoin issuance, it applies to a firm issuing from an establishment in the UK, or arranging for all three limbs of the activity to be carried out in the UK on its behalf.

The application window

Regulation 52 required the FCA to specify an application period at least a year before commencement. Its direction of 20 February 2026 sets that period to run from 9:00am on 30 September 2026 to 11:59pm on 28 February 2027. The FCA has power to extend it.

What follows depends on when a firm applies.

The transitional provision is a wind-down rather than a licence to trade. It exempts a firm from the general prohibition only so far as needed to perform contracts entered into before it entered the provision. Firms inside it cannot enter new contracts with new UK customers or with existing ones, and the period runs for a maximum of two years.

The FCA has said it will not accelerate assessment for firms that apply late, and that applications are reviewed in the order received. A Pre-Application Support Service is open for firms preparing to apply.

The rules

The FCA published five policy statements on 30 June 2026, the output of consultations running back to 2023.

Three pieces of finalised guidance sit alongside them: FG26/5 on the Consumer Duty, FG26/6 on operational resilience and FG26/7 on the FCA’s approach to international cryptoasset firms.

Authorised cryptoasset firms come inside the Handbook. That brings the Consumer Duty, the conduct of business rules, the Senior Managers and Certification Regime, operational resilience requirements, financial crime obligations, prudential capital requirements and regulatory reporting, on top of the activity-specific rules for stablecoin backing, custody, lending disclosures and market abuse controls.

Money laundering registration

Registration under the Money Laundering Regulations 2017 is still the operative requirement today. Regulation 14A brings in two kinds of business: cryptoasset exchange providers, which includes exchanges, ATMs and peer-to-peer platforms, and custodian wallet providers. A firm must register before it starts trading. The FCA is explicit that registration tests financial crime controls and is not an endorsement of the business.

Applications have four outcomes. Rejection is for applications that arrive without the minimum required information. Refusal follows a full assessment. Withdrawal is the applicant’s own decision.

Those are FCA figures as at 1 July 2026, covering every application since 10 January 2020. The FCA has received 408 in total.

Registration does not convert into authorisation. Firms already registered under the MLRs still need to apply through the gateway, and the FCA has said being registered does not guarantee authorisation. Its guidance is that firms should focus on FSMA authorisation after 30 September 2026, and that MLR applications submitted after 31 July 2027 are unlikely to be determined before the new regime starts.

Regulation 48 of SI 2026/102 removes the duplication once the regime is live: firms authorised for the new cryptoasset activities will not separately apply for MLR registration, only notify the FCA. Every other MLR obligation continues to apply to them in full.

Financial promotions

Cryptoasset promotions came inside the financial promotions regime on 8 October 2023. The rules apply to any firm marketing cryptoassets to UK consumers, including firms based overseas. Cryptoassets are categorised as Restricted Mass Market Investments, which permits mass marketing subject to conditions.

There are four lawful routes to communicate a promotion:

1. It is communicated by an FSMA-authorised firm.
2. It is made by an unauthorised person and approved by an authorised firm holding the permission to approve promotions, known as a section 21 approver.
3. It is communicated by a cryptoasset business registered with the FCA under the MLRs.
4. It meets the conditions of an exemption in the Financial Promotion Order.

The conditions attached to the RMMI category are what consumers actually see: prescribed risk warnings, a ban on incentives to invest such as refer-a-friend and new-joiner bonuses, positive frictions including a 24-hour cooling-off period, client categorisation, and an appropriateness assessment before a consumer can proceed. All promotions must also be fair, clear and not misleading.

Route 3 has an end date. Part 5 of SI 2026/102 removes the provisions that let MLR-registered cryptoasset firms approve their own promotions. HM Treasury’s explanatory memorandum records that these were always intended to be temporary, reflecting that no FSMA regulated activities for cryptoassets existed at the time. Firms authorised under the new regime will approve their own promotions in the same way as any other authorised firm.

Exchange traded notes and derivatives

Retail access to crypto exchange traded notes opened on 8 October 2025, five years after the original prohibition. Professional investors had gained access in March 2024.

A cETN is available to retail consumers where it is listed on the FCA’s Official List and admitted to trading on a UK Recognised Investment Exchange. They are Restricted Mass Market Investments, so the promotions rules and the Consumer Duty apply, and there is no Financial Services Compensation Scheme cover. The FCA’s ban on retail access to cryptoasset derivatives remains in place.

A quarterly consultation, CP26/17, has proposed allowing certain funds to invest up to 10% in cryptoasset exchange traded notes.

Stablecoins and the two regulators

Stablecoin issuance is split between the FCA and the Bank of England.

The FCA regulates all qualifying stablecoin issuers issuing from an establishment in the UK, under PS26/10, with objectives covering consumer protection, competition and market integrity. HM Treasury decides whether a payment system is systemic, applying the criteria in the Banking Act 2009. Where a stablecoin is recognised as systemic, the Bank of England takes on prudential regulation alongside the FCA, acting under its financial stability objective.

The Bank published its policy statement and draft Code of Practice on 22 June 2026. Two points changed from its November 2025 consultation. The maximum share of backing assets held in interest-bearing assets, meaning short-term UK government debt, went up from 60% to 70%, with the remainder in central bank deposits so redemptions can be met promptly. The temporary holding limits for individuals and businesses that the Bank consulted on were dropped, replaced by a temporary issuance guardrail applying to each systemic stablecoin and initially set at £40 billion. Feedback on the draft Code closes on 22 September 2026, and the Bank intends to finalise it by the end of 2026.

Related

The Travel Rule covers the AML obligation that follows transfers between firms. How stablecoins hold their peg explains the backing designs these rules are written around.

This page summarises published rules. It is not legal or investment advice, and firms should work from the FCA’s own material and take their own advice.