UK Cryptoasset Regulations (October 2027)

Consumer Composite Investments (CCI)
30/03/2026
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What happened to crypto currencies in 2019

Background

On February 4 2026, the FSMA (Financial Services and Markets Act) 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) were published, which establishes a new regulatory regime for cryptoassets in the UK, folding into the existing FSMA framework. The framework is a major step forward for the cryptoasset industry and the FCA has consulted on key parts of the regime through consultation papers, such as:

The full list can be found under ‘Key publications’. Over the coming months, the FCA will continue to publish further policy consultations setting out proposed rules and guidance. The final rules will be set out in 2026. These activities fall within the wider FCA Crypto Roadmap.

The regime takes effect from 25 October 2027, with the authorisation gateway opening from 30 September 2026, enabling a smooth transition to the new rules. Alongside the EU’s MiCA regime and the US GENIUS Act, these developments signal a broader global shift towards formal regulation of cryptoassets and stablecoin payment use-cases.

Approach

PryceWilliams’ perspective on the upcoming cryptoasset regulations is backed by extensive experience helping firms adapt to regulatory change and implementing blockchain/cryptoasset solutions for clients. Our overarching perspective is that cryptoassets are finding real-world use-cases on multiple fronts, for example, providing payment rails for cross-border transactions with Stablecoins. While regulatory authorities previously tried to fit cryptoassets into frameworks for adjacent technologies, such as existing e-money rules, unique properties like Token minting and Smart Contracts require distinct rules to be established.

Analysis

Historically, the UK’s regulations for most firms engaged in cryptoassets have encompassed AML supervision under the Money Laundering Regulations (MLRs) and restrictions on financial promotions to UK customers. For the latter, a firm marketing a crypto product to UK markets, such as an exchange or custodial service, must go through the mandatory route as set out by the FCA. This includes:

  • Promotion being communicated by an FCA-authorised person
  • Being approved by FCA-authorised person
  • Falling under relevant exemptions

The FCAs recent High Court proceedings against HTX, the overseas cryptoasset exchange, for alleged breaches of the financial promotion’s regime despite the disclaimers the company provided illustrates this point, with the FCA seeking a declaration of breach, an injunction restraining further unlawful financial promotions, and costs.

Broader activities, like operating a cryptocurrency exchange, have not generally required FSMA-like permissions for cryptoassets that are not regulated instruments, in the same way that traditional securities exchanges do. That is, unless the exchange offers investments such as: derivatives, futures and options, as these activities are already regulated under FSMA today, and therefore require relevant FCA authorisation.

The regime due to take effect from 25 October 2027 changes this. It intends to bring a wider set of cryptoasset activities into dedicated FSMA permissions.

Examples include:

Operating a Cryptoasset Trading Platform (CATPs)

Firms running systems which bring together multiple third parties buying and selling interests in qualifying cryptoassets.

Cryptoasset Intermediation

Firms dealing in qualifying cryptoassets as principle, dealing in qualifying cryptoassets as agent or arranging deals in qualifying cryptoassets.

Cryptoasset Lending and Borrowing

An activity where a cryptoasset holder transfers ownership of their assets to a third-party in exchange for a return on the value of the assets (Lending), or on the other end, the receiver of the original cryptoasset (Borrowing).

Cryptoasset Staking

Where cryptoassets are used and locked for blockchain validation, such as Ether for the Ethereum blockchain, in exchange for a financial reward.

More details can be found here: CP25/40

These changes are significant for UK cryptoasset firms. Decision-makers must prepare and decide whether to obtain the appropriate authorisation to begin or continue serving UK markets or exit entirely.

The FCA will begin receiving applications on 30 September 2026 and have stated that applications made in during the application period, which extends to 28 February 2027, will be processed in time for the new regime. This leaves only a 5-month period for firms to apply in time for the regime to go live. However, the FCA has clarified that applications made within this period, that are unable to receive licensing within the regulatory timeframe, will be able to continue operations while the application process is finalised with the FCA.

Conclusions

Firms engaging in cryptoasset activity should be aware of the following:

  • A new cryptoasset regulatory framework comes into force on 25 October 2027.
  • Among other new rules, previously unregulated activities, such as operating a cryptoasset platform, will become regulated activities from 25 October 2027.
  • If your firm offers in-scope products, you will need FCA authorisation/permissions.
  • The application period opens on 30 September 2026 and runs until 28 February 2027, giving firms a 5-month window to apply for authorisation ahead of the regime’s commencement on 25 October 2027.
  • If your firm applies after 28 February 2027, it should not assume that it can continue activities from October 2027 while waiting for approval.

Recommendations

To prepare for the incoming regulations, firms should:

  • Review: Assess whether the products or services your firm offers are within scope of the regime.
  • Decide: If your firm does offer the in-scope activities, decide whether continuing to offer these products or services aligns with your long-term strategy. If it does, your firm will be required to gain the required authorisations.
  • Contact: PryceWilliams are experts in regulatory change. Contact us to understand how we can work together to ensure the smooth implementation of the changes.

Next Steps

PryceWilliams provides specialist consulting and project delivery services for organisations undergoing strategic change, regulatory compliance and technology transformation needs. Our focus is on supporting the project sponsor to ensure project implementation is delivered on time and within budget. Should you need support, contact us to make progress happen.

References

This document is written in general terms and is not advice. PryceWilliams accepts no liability for action or inaction as a result of any content in our various publications.
Samuel Parke
Samuel Parke

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