Full story
FCA's Crypto Perimeter
The FCA has published its Cryptoasset Perimeter Guidance, proposing detailed rules that would bring most crypto activities under the Financial Services and Markets Act by October 25, 2027.
“The UK Financial Conduct Authority has proposed detailed cryptoasset perimeter guidance that would bring most crypto activities under the Financial Services and Markets Act by October 25, 2027”
Any firm holding client crypto assets for more than 24 hours or with the ability to override client authority would be treated as a regulated custodian requiring a full safeguarding license.
Validators, node operators, and stablecoin issuers face tighter rules, including loss of tech-only exemptions when offering added-value features.
The FCA made clear that arrangements involving smart contracts or decentralization do not place the activity outside regulation.
Stablecoin issuance is considered legal only if the issuer is established in the UK and manages the entire lifecycle.
Consultation and Industry Reaction
The FCA's consultation marks another step toward full crypto regulation in the UK.
Firms will be able to start applying for authorization from September 2026.
Industry reactions are mixed: Thomas Cattee said the UK is significantly lagging behind Europe, while Nick Jones called it a hugely positive step forward.
The FCA plans to consult later this year on DeFi guidance and operational resilience.
The new regime forces all entities providing crypto services to transition from the current money-laundering registrations to a more strict approval regime.
Stablecoins and Custody Challenges
The FCA's guidance requires UK-based stablecoin issuers to control the full lifecycle.
“Validators and node operators will lose their pure tech exemption the moment they provide added value features”
The regulator addressed shadow custody, declaring that if a provider can theoretically override a client's authority, it is officially a custodian.
This could sweep in platforms and software providers that don't consider themselves custodians.
Validators and node operators will lose pure tech exemptions when providing added-value features.
The consultation complements recent Treasury legislation that expands the list of regulated activities.