UK cryptoassets regulation: What firms need to know and why early action matters

What’s changing?

The new regime amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, introducing a comprehensive regulatory framework for cryptoassets. Key changes include:

• Clear definitions of regulated cryptoassets, including qualifying stablecoins and specified investment cryptoassets.
• New regulated activities such as issuing, safeguarding, trading, and arranging deals in cryptoassets, all requiring FCA authorisation.
• Designated activities for public offers and admissions to trading, with a ban on public offers unless specific exceptions apply.
• A market abuse framework for cryptoassets, including disclosure obligations and systems for market abuse prevention.
• Consequential amendments to anti-money laundering and financial promotions requirements.

What it means for firms

Any firm wishing to carry out regulated cryptoasset activities must apply for FCA authorisation. This includes firms who are already registered for Anti-Money Laundering, together with firms who are already authorised and wish to vary their permission. There is no automatic conversion or expedited process for this. The regime represents a significant step up from current requirements, moving from basic AML registration to full FCA oversight, robust consumer protection, and market integrity standards. All firms will need to implement risk and compliance frameworks overseen by effective governance and control arrangements to demonstrate that they can operate safely and sustainably within the new regulated environment.

Starting early matters

The new regime goes live on 25 October 2027, but the FCA will open the application window (referred to as the ‘application period’) well before then, with the current plan to open the application window in September 2026. Early preparation and application offer several benefits:

• Reduced risk of operational interruptions: Where a firm applies for authorisation or a variation of permissions within the application period, the FCA will expect to determine the application before the new regime commences or apply a saving provision allowing firms to continue to provide cryptoasset services until its application has been finally determined.

Firms that submit an application outside of the application window (later than 28 days prior to the commencement of the new regime), will not be authorised at the commencement of the regime and will enter the transitional provision whilst their application is determined. During this transition period, whilst firms will be able to continue to perform pre-existing contracts, they will be required to adhere to the transitional provision requirements and will be unable to conduct new UK regulated cryptoasset activities until authorised.

• Lessons learned from the AML regime: as well as being a significant step up for firms, it is also a significant step up for the FCA. The FCA will need to get comfortable with the new regime and the type of business models that are being presented. The AML regime highlighted the need for more personnel and more guidance to reduce application waiting times. It is reasonable to anticipate the same with this regime, which could lead to lengthy delays. It is important to note that whilst the FCA has new statutory targets to process applications within 4 months, this is only for complete applications. It is prudent to account for further questions, which would deem an application incomplete and therefore not start the clock.
• Strategic readiness: Time to build / enhance systems to ensure compliance with the new regime alongside engagement with FCA consultations and webinars.
• Competitive advantage: Early authorisation builds trust and credibility with clients and investors.

Key component uplifts

Start now

In order to submit a clear and considered application to achieve successful authorisation and avoid interruption to your business, we recommend starting to prepare for this work now. All Firms should consider

• Assessing your business model and identifying all relevant crypto asset related activities.
• Seeking legal & compliance advice on regulatory strategy and preparing the FCA application.
• Drafting & uplifting policies, procedures, and disclosure documents.
• Implementing formal project management and structure to managing the authorisation process and liaising with the FCA.
• Seeking advisory support for ongoing compliance post-authorisation.

The FCA’s new cryptoasset regime is a major regulatory milestone. Firms should act now to understand the requirements, prepare for authorisation, and position themselves for success in a regulated market.

Authored by John Salmon, Michael Thomas, Mark Aengenheister, Nick Oxley, and Lavan Thasarathakumar.