The New UK Cryptoasset Regime — It’s Time to Act and Build Your Plan

The Financial Conduct Authority (FCA) hosted a webinar on 29 January on the new regime for cryptoasset regulation that will commence 25 October 2027.

The FCA stressed the importance for cryptoasset businesses to act now and start preparing to apply for authorisation under the new regime, including engaging early with the FCA ahead of any application submission.

The change from anti-money laundering regulation to full FCA authorisation will be a fundamental change given the range of new obligations that cryptoasset firms will need to comply with. The additional blocks of requirements that the FCA identified — in addition to requirements under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) — are Operational Resilience, the FCA’s Principles for Businesses, Conduct, the Senior Managers Regime and individual conduct regulation, Prudential Management, Client Assets, Outsourcing Arrangements, Financial Crime and Market Abuse. The FCA in particular referenced regulatory capital requirements and the Senior Managers and Certification Regime.

All businesses seeking to provide cryptoasset activities from 25 October 2027 must obtain authorisation from the FCA under the Financial Services and Markets Act 2000 (FSMA) by this date. Firms already registered to provide cryptoasset activities under the MLRs, firms presently doing business in the UK using an s.21 financial promotion approver and firms wishing to access the UK market in the future are all subject to this requirement.

Below are some critical takeaways.

Key Dates

• July 2026: The FCA will (1) publish the draft application forms for new FSMA licences and variation of permission; and (2) open its pre-application support service (PASS) for those seeking to apply for authorisation under the new regime.
• 30 September 2026 – 28 February 2027: This period is the application window for firms already registered under the MLRs and FSMA firms that need to vary their permissions to conduct cryptoasset activities. The FCA said on 29 January that firms applying during this period will be in the best position to receive authorisation before the new regime commences. The FCA said that while it does not anticipate that every firm will be successful, it is committed to work with firms through an iterative process.
• 30 September 2026: Currently unregistered firms can apply to become authorised under the new regime from this date. For new firms, the gateway will remain open throughout 2027.
• 25 October 2027: The new regime comes into force. The FCA also confirmed that from this date, all s.21 approval arrangements will fall away and such firms will need to be authorised to continue to provide services to UK customers.

Why the Application Period Matters

• Firms that apply during the application period — If a firm applies for authorisation (or variation) during the application period, the FCA will endeavour to determine the application before the new regime commences. Otherwise, the firm will enter the “saving provision” which will allow it to continue to provide cryptoasset services, including conducting new business, until its application has been finally determined.
• Firms that do not apply during the application period — If a firm does not apply for authorisation (variation) during the application period (but before the new regime commences), and if its application has not been determined before the new regime commences, the firm will enter the “transitional provision” and will only be able to continue to service existing UK customers and will be unable to take on new UK business unless authorised.
• Firms that do not apply — Firms that do not intend to apply for authorisation must run-off their UK business before the new regime commences. Under these circumstances, there will be no access to the saving or transitional provisions. Firms that fail to run-off their UK business could face prosecution.

PASS Process

Firms that are already registered with the FCA will be contacted proactively by the FCA for pre-application engagement.

Other firms are encouraged to use the PASS to have early engagement with the FCA on their plans. As stated above, the PASS process will open in July 2026 so firms can start meeting and discussing their plans with the FCA from then.

The FCA recommends — but does not require — that firms make use of the PASS process which could take place via interviews and workshops with the FCA.

The FCA does not expect submission of a final business plan or application pack as part of the PASS process but will want sufficient information to allow it to understand a firm’s business plans so that it can assess its risks and controls.

Application Process

While the FCA will apply its “ready, willing and organised” test to authorisation applications, it appreciates that at the time of submission, firms might not be completely ready to start the new business. The FCA acknowledges this limitation but will require firms to demonstrate how they will become ready by the time of authorisation. A pragmatic and credible plan will be required.

The FCA confirmed that for cryptoasset firms already registered under the MLRs, it will take into account what the FCA already knows about the firm and that the FCA won’t therefore be starting with a blank piece of paper on their application. The same principle applies for FSMA authorised firms seeking a variation of permission, though in the latter case the firm is likely to be entering into a new business line. Therefore, the FCA expects these firms to clearly demonstrate how they have adapted existing controls to cryptoasset activities.

The FCA will use “minded to approve” notifications setting out that it is broadly comfortable with the application and that it will approve the firm as long as certain factors are addressed. For example, full capitalisation could be arranged after the “minded to approve” letter, so long as there is a clear plan on how the required capital will be sourced and held.