United Kingdom -- Licensing Requirements Regulatory Overview

FCA — MLR registration and AML/CTF supervision of cryptoasset businesses (since 10 January 2020), supervision of cryptoasset financial promotions (since 8 October 2023), and authorisation, conduct and prudential regulation under SI 2026/102 from 25 October 2027. Of 393 MLR applications determined since January 2020, 68 were registered, 46 rejected, 265 withdrawn and 14 refused (as at 1 October 2026).

Bank of England / PRA — on 22 June 2026 the Bank published its policy statement and draft Code of Practice for sterling systemic stablecoins, moving from proposed holding limits to a temporary issuance guardrail and revising backing-asset composition; it regulates recognised systemic stablecoin issuers jointly with the FCA (approach of 30 June 2026), and the PRA set interim expectations for banks' tokenised-asset, stablecoin and cryptoasset exposures in a Dear CEO letter of 18 May 2026.

HM Treasury — policy and legislation for cryptoassets: made the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) as a single-phase regime after announcing on 21 November 2024 that stablecoin activities would follow the same timetable as the rest of the regime; also made SI 2023/612 (promotions) and SI 2025/17 (staking not a CIS); recognises systemic stablecoin issuers under the Banking Act 2009.

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692), as amended by SI 2019/1511 with effect from 10 January 2020 — AML/CTF registration and supervision of cryptoasset exchange providers and custodian wallet providers (regs 14A, 56, 58A); travel rule in Part 7A from 1 September 2023 (SI 2022/860).

Financial Services and Markets Act 2000, as amended by FSMA 2023 s.69 (in force 29 August 2023) — s.22 extended so regulated activities may relate to cryptoassets and s.417 given a cryptoasset definition; the regulated activities themselves are created by SI 2026/102 from 25 October 2027, and the crypto financial-promotions regime came from SI 2023/612 (7 October 2023).

Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (SI 2023/612, made 7 June 2023, in force for all purposes 7 October 2023) — adds "qualifying cryptoasset" as a controlled investment and creates the art 73ZA exemption for MLR-registered firms' own promotions; the FCA classifies qualifying cryptoassets as restricted mass market investments in COBS 4.12A and has applied the regime since 8 October 2023.

FCA MLR registration is required for cryptoasset exchange providers and custodian wallet providers. Since January 2020 the FCA has received 427 applications and determined 393: 68 registered (17%), 46 rejected (12%), 265 withdrawn (67%) and 14 refused (4%) as at 1 October 2026. The FSMA-based regime under SI 2026/102 (trading platforms, dealing, arranging, safeguarding, staking, qualifying stablecoin issuance) starts 25 October 2027.

Custodian wallet providers currently need MLR registration, which imposes AML/CTF duties only and no safeguarding rules; from 25 October 2027 safeguarding qualifying cryptoassets is a regulated activity (RAO art 9N, SI 2026/102) requiring FCA authorisation, the FCA applies CASS 17 to client cryptoassets, and CRYPTOPRU prudential requirements apply (PS26/12, 30 June 2026).

EXCHANGE: MLR registration plus the financial-promotions rules in COBS 4.12A (prescribed risk warnings, fair clear and not misleading, incentive ban). The retail ban on cryptoasset derivatives (CFDs, futures, options) has applied since 6 January 2021 (PS20/10) and remains; retail access to crypto exchange-traded notes traded on an FCA-approved UK exchange reopened on 8 October 2025.

HM Treasury sets UK cryptoasset policy and makes the legislation: it consulted on the future regime from 1 February to 30 April 2023 (response 30 October 2023), published the draft statutory instrument and policy note that became SI 2026/102, and made SI 2023/612 (financial promotions) and SI 2025/17 (staking).

HM Treasury consulted on the future cryptoasset regime (1 February to 30 April 2023, response 30 October 2023), published an update on fiat-backed stablecoin regulation on 30 October 2023, and published the draft SI and policy note for the regulated-activities regime (updated 16 December 2025) that was made as SI 2026/102.

The FCA is the UK conduct regulator for financial services and the regulator for cryptoassets: AML/CTF supervisor of cryptoasset businesses since 10 January 2020, supervisor of the cryptoasset financial-promotions regime since 8 October 2023, and from 25 October 2027 the authorising, conduct and prudential regulator for the activities in SI 2026/102.

The FCA registers and supervises cryptoasset exchange providers and custodian wallet providers for AML/CTF under the Money Laundering Regulations 2017 (regs 14A and 56), a regime in force since 10 January 2020 (SI 2019/1511).

The FCA supervises and enforces the cryptoasset financial-promotions regime that applies since 8 October 2023 under FSMA 2000 s.21 and SI 2023/612, issuing 146 alerts about illegal promotions in the regime's first 24 hours; its rules are in COBS 4.12A and its guidance in FG23/3.

The FCA's perimeter guidance on cryptoassets is PS19/22 Guidance on Cryptoassets (23 January 2019), setting out where tokens are specified investments, e-money, within the Payment Services Regulations or outside regulation, supplemented by PS26/18 Cryptoasset perimeter guidance (16 September 2026) on when the new regulated activities need FCA authorisation.

The FCA Innovation Hub supports innovative firms through the Regulatory Sandbox (live testing with real consumers, applications accepted at any time of year), Innovation Pathways (help understanding how FCA regulation applies), the Digital Sandbox (synthetic data sets) and the AI Lab.

The Bank of England is responsible for monetary and financial stability and, with the FCA, regulates stablecoin issuers recognised as systemic by HM Treasury (Bank leading on prudential matters, FCA on conduct); the PRA, part of the Bank, supervises banks and designated investment firms including their cryptoasset exposures; the Bank and FCA jointly run the Digital Securities Sandbox for DLT in financial market infrastructure.

The Bank of England published its policy statement and draft Code of Practice for sterling-denominated systemic stablecoins on 22 June 2026, replacing proposed holding limits with a "temporary issuance guardrail" per systemic stablecoin and revising backing-asset composition; it intends to finalise the Code of Practice by end-2026, applying to issuers recognised as systemic by HM Treasury.

DLT in financial market infrastructure is tested in the Digital Securities Sandbox, an FMI sandbox established by SI 2023/1398 (in force 8 January 2024) and run jointly by the Bank of England and the FCA; it is open to firms legally established in the UK and operational until December 2028.

The PRA set out its expectations for banks' and designated investment firms' prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures in a Dear CEO letter dated 18 May 2026.

MLR registration is required for cryptoasset exchange and custodian wallet services provided by way of business in the UK, and registration must be obtained before any in-scope service starts; the presence of a crypto ATM in the UK is treated as business carried on in the UK.

A "cryptoasset exchange provider" under MLRs 2017 reg 14A is a firm or sole practitioner that by way of business exchanges or arranges the exchange of cryptoassets for money or money for cryptoassets, exchanges one cryptoasset for another, or operates a machine (crypto ATM) that exchanges cryptoassets for money — including where it is the creator or issuer of the cryptoassets involved.

A "custodian wallet provider" under MLRs 2017 reg 14A is a firm or sole practitioner that by way of business provides services to safeguard, or to safeguard and administer, cryptoassets on behalf of its customers, or private cryptographic keys on behalf of its customers in order to hold, store and transfer cryptoassets.

MLRs 2017 reg 28(2) requires a registered cryptoasset business to identify each customer and verify the customer's identity before or during the business relationship, unless already verified by that firm.

MLRs 2017 reg 28(11) requires a registered cryptoasset business to conduct ongoing monitoring of each business relationship, including scrutiny of transactions undertaken throughout the course of the relationship.

Under MLRs 2017 Part 7A (regs 64A–64H, in force 1 September 2023 via SI 2022/860) the originator's cryptoasset business must ensure every inter-cryptoasset-business transfer carries the names and account numbers of originator and beneficiary; fuller originator identifiers are required on transfers equal to or exceeding £800 (threshold substituted from 30 June 2026 by SI 2026/621) and on all transfers where every cryptoasset business in the chain carries on business in the UK.

Under MLRs 2017 reg 58A the FCA must refuse to register a cryptoasset business unless the applicant and each of its officers, managers and beneficial owners is a fit and proper person to carry on the business of a cryptoasset exchange provider or custodian wallet provider; a conviction for a Schedule 3 offence is disqualifying, and the FCA otherwise weighs compliance history, money-laundering risk of the business, and the skills, experience and probity of those persons.

Since 8 October 2023 the promotion of qualifying cryptoassets to UK consumers has been subject to the financial promotion restriction in FSMA 2000 s.21, following the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (SI 2023/612, made 7 June 2023), with FCA rules in COBS 4.12A.

Qualifying cryptoassets are "restricted mass market investments" under FCA Handbook COBS 4.12A.11R(1)(d): promotions must carry a prescribed risk warning (4.12A.10R), must not offer monetary or non-monetary incentives to retail clients (4.12A.7R), and direct-offer promotions require a 24-hour cooling-off period (4.12A.18R), client categorisation as restricted, high net worth or sophisticated investor (4.12A.21R) and an appropriateness assessment (4.12A.28R).

A cryptoasset financial promotion to UK consumers is lawful only if it is communicated by an FCA-authorised person, approved by an FCA-authorised person, communicated by a cryptoasset business registered with the FCA under the MLRs (Financial Promotion Order art 73ZA, own promotions only), or falls within an exemption in the Financial Promotion Order.

Cryptoasset financial promotions must be fair, clear and not misleading, as set out in the FCA's finalised guidance FG23/3 (2 November 2023) on how firms meet the PS23/6 rules.

Under FCA Handbook COBS 4.12A.10R a firm must not communicate or approve a financial promotion relating to a restricted mass market investment, including qualifying cryptoassets, unless it carries the prescribed prominent risk warning.

Under FCA Handbook COBS 4.12A.7R a firm must not communicate or approve a promotion of a restricted mass market investment, including qualifying cryptoassets, that offers a retail client any monetary or non-monetary incentive to invest; guidance at COBS 4.12A.8G gives bonuses for referring another person as an example.

Under FCA Handbook COBS 4.12A.21R a firm may communicate a direct-offer promotion of a qualifying cryptoasset to a retail client only after taking reasonable steps to establish that the client is a high net worth investor, a sophisticated investor or a restricted investor, and COBS 4.12A.28R requires an appropriateness assessment before processing the order.

The FCA enforces the cryptoasset financial-promotions regime and issued finalised guidance FG23/3 (2 November 2023) on compliance; communicating a promotion in breach of FSMA 2000 s.21 is a criminal offence punishable on indictment by up to two years' imprisonment, an unlimited fine, or both (FSMA s.25).

Under PS19/22 (January 2019) the FCA applies existing regulation to cryptoassets that are specified investments under the Regulated Activities Order, e-money under the Electronic Money Regulations 2011 or captured by the Payment Services Regulations 2017, with other tokens outside regulation; from 25 October 2027 SI 2026/102 adds bespoke regulated activities for "qualifying cryptoassets" that are not specified investments or e-money.

A cryptoasset that is a specified investment under the Regulated Activities Order (for example a share, debt instrument or unit in a collective investment scheme) is within the FSMA 2000 perimeter and carrying on regulated activities in relation to it without authorisation breaches the general prohibition in FSMA s.19; the FCA's PS19/22 sets out when tokens fall into this category.

Cryptoassets that meet the definition of electronic money in the Electronic Money Regulations 2011 reg 2 — electronically stored monetary value represented by a claim on the issuer, issued on receipt of funds for making payment transactions and accepted by a person other than the issuer — are regulated as e-money, and the FCA's PS19/22 identifies which tokens fall under those Regulations.

Cryptoassets such as Bitcoin and Ether that are neither specified investments nor e-money sit outside the existing FSMA perimeter (PS19/22) and are covered today only by MLR registration and the promotions regime; from 25 October 2027 they are "qualifying cryptoassets" and dealing, arranging, safeguarding, operating a trading platform and staking in relation to them are regulated activities under SI 2026/102.

HM Treasury's 2023 "phase 1" plan to regulate fiat-backed payment stablecoins first (update of 30 October 2023; FCA DP23/4) was dropped on 21 November 2024 in favour of a single phase; issuing a qualifying stablecoin is instead a regulated activity (RAO art 9M) under SI 2026/102 from 25 October 2027, with FCA final rules in PS26/10 (30 June 2026).

Issuing a qualifying stablecoin from an establishment in the UK (RAO art 9M) and safeguarding qualifying cryptoassets including stablecoins (art 9N) are regulated activities under SI 2026/102 from 25 October 2027; a "qualifying stablecoin" is a qualifying cryptoasset that seeks to maintain a stable value by reference to fiat currency (art 88G).

The FCA will authorise and supervise issuers of UK qualifying stablecoins from 25 October 2027 under RAO art 9M and PS26/10 (30 June 2026); HM Treasury decided not to amend the Payment Services Regulations 2017 for UK-issued stablecoins "at this time", so use of stablecoins for payments is not yet separately regulated.

HM Treasury may recognise a stablecoin issuer as systemic under the Banking Act 2009 (as amended by FSMA 2023) after consulting the Bank of England, FCA and PSR; a recognised issuer is then regulated jointly, with the Bank leading on prudential matters and the FCA on conduct, under the approach published 30 June 2026 and the Bank's policy statement of 22 June 2026.

The former "phase 2" was merged into a single regime: SI 2026/102 (in force 25 October 2027) regulates public offers and admissions to trading, market abuse, safeguarding (art 9N), operating a trading platform (art 9S), dealing as principal and agent (arts 9T, 9W), arranging (art 9Y), staking (art 9Z6) and qualifying stablecoin issuance (art 9M) in one instrument.

SI 2026/102 Part 2 Chapter 1 (regs 3–16) regulates qualifying cryptoasset public offers and admissions to trading on a qualifying cryptoasset trading platform as designated activities from 25 October 2027, with FCA admissions and disclosures rules in PS26/9 (30 June 2026).

From 25 October 2027 exchange services are regulated beyond AML: operating a qualifying cryptoasset trading platform (RAO art 9S) and dealing in qualifying cryptoassets as principal or agent (arts 9T, 9W) require FCA authorisation under SI 2026/102, with final FCA rules in PS26/11 (30 June 2026).

From 25 October 2027 safeguarding of qualifying cryptoassets is a regulated activity (RAO art 9N, SI 2026/102) and the FCA applies CASS 17 client-asset rules to client cryptoassets under its final rules of 30 June 2026.

Staking: arrangements for qualifying cryptoasset staking are not a collective investment scheme (SI 2025/17, in force 31 January 2025) and qualifying cryptoasset staking becomes a regulated activity (RAO art 9Z6) on 25 October 2027. Lending and borrowing are captured within dealing as principal and arranging under SI 2026/102. DeFi: the SI has no special provisions for decentralised models; the FCA decides case by case whether a controlling party needs authorisation and plans a further perimeter consultation in late 2026.

SI 2026/102 Part 2 Chapter 2 (regs 17–34) creates a market abuse regime for qualifying cryptoassets and related instruments — inside information, market manipulation and related designated-activity rules — in force 25 October 2027, with FCA rules in PS26/9 (30 June 2026).

The regime was delivered by secondary legislation: FSMA 2023 s.69 (in force 29 August 2023) amended FSMA 2000 s.22 so regulated activities may relate to cryptoassets, and the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) create the new regulated and designated activities, in force 25 October 2027.

The Digital Securities Sandbox, established by the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023 (SI 2023/1398, in force 8 January 2024), is an FMI sandbox in which firms legally established in the UK can use developing technology such as distributed ledger technology to issue, trade and settle digital securities under modified rules, operated jointly by the Bank of England and the FCA until December 2028.

Consumer protection in the new regime: the FCA applies key Handbook obligations including the Consumer Duty to regulated cryptoasset activities from 25 October 2027 (PS26/13, FG26/5, 30 June 2026); MLR registration confers no Financial Ombudsman or FSCS protection and registered firms must tell customers so under MLRs reg 60A.

The FCA published finalised guidance FG26/6 Cryptoasset Operational Resilience on 30 June 2026 alongside its final rules for the regime that applies from 25 October 2027.

Cryptoasset exchanges currently need only MLR registration; from 25 October 2027, operating a qualifying cryptoasset trading platform (RAO art 9S), dealing in qualifying cryptoassets as principal (art 9T) or as agent (art 9W), and arranging deals (art 9Y) are regulated activities under SI 2026/102 requiring FCA authorisation.

There is no "24-hour rule" for cryptoasset custody in UK law: SI 2026/102 reg 40 makes safeguarding qualifying cryptoassets a regulated activity (RAO art 9N) from 25 October 2027, subject to exclusions for group arrangements (art 9O), introductions (art 9P), temporary settlement arrangements (art 9Q) and other cases (art 9R); overseas firms serving UK consumers need UK authorisation.

Cryptoassets are not "funds" under the Payment Services Regulations 2017 (reg 2: banknotes and coins, scriptural money and electronic money), so pure cryptoasset payment processing is not a payment service; the fiat-crypto exchange element requires MLR registration as a cryptoasset exchange provider, and HM Treasury decided not to amend the PSRs for UK-issued stablecoins "at this time".

As of October 2026, cryptoasset exchange providers and custodian wallet providers carrying on business in the UK must be registered with the FCA under the Money Laundering Regulations 2017 for AML/CTF purposes (mandatory since 10 January 2020); MLR registration covers only AML/CTF supervision, confers no FOS or FSCS protection, and remains required until the FSMA regime starts on 25 October 2027.

Under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) cryptoasset activities become FSMA regulated activities requiring full FCA authorisation from 25 October 2027; MLR registration does not automatically convert — registered firms must obtain FSMA authorisation through the application window of 30 September 2026 to 28 February 2027, and must stay MLR-registered until the new regime starts.

MLR registration is triggered by carrying on cryptoasset business in the UK (a UK crypto ATM counts); under SI 2026/102, from 25 October 2027, operating a trading platform, dealing or arranging for UK consumers requires UK authorisation regardless of whether the firm is based in the UK or overseas, while overseas firms serving only UK institutional customers (not intermediaries to UK consumers) are not required to be authorised.

MLR registration carries no minimum capital requirement; from 25 October 2027 FSMA-authorised cryptoasset firms must meet the FCA's CRYPTOPRU prudential regime (PS26/12, 30 June 2026, consulted in CP25/42), including capital and stress-testing requirements.

MLR-registered cryptoasset businesses must appoint a nominated officer (MLRO) under reg 21(3), identify and verify customers under reg 28(2), conduct ongoing monitoring including scrutiny of transactions under reg 28(11), and the FCA expects evidenced transaction-monitoring rules and sanctions-specific controls in the registration application.

For MLR registration the FCA expects a described UK compliance function with named role-holders and an MLRO appointed under reg 21(3); under SI 2026/102 firms serving UK consumers through a trading platform, dealing or arranging must be authorised in the UK regardless of where they are based, and the FCA published its approach to international cryptoasset firms as FG26/7 on 30 June 2026.

The FCA's MLR registration assessment covers beneficial owners (as defined in MLRs regs 5 and 6), officers and managers, each of whom must pass the reg 58A fit and proper test; the FCA expects a Money Laundering Reporting form for every such individual and an MLRO appointed under reg 21(3).

MLR registration applications are submitted to the FCA through its Connect system with the Category 6 application fee paid on submission; the fee is not refunded on withdrawal or refusal, and the FCA has 3 months to decide once it holds all the information needed for a determination.

For FSMA authorisation under the new cryptoasset regime (SI 2026/102): the application period opened 30 September 2026 and closes 28 February 2027, applications are made via the FCA Connect system, and the regime commences 25 October 2027; firms that apply within the window and are undetermined at commencement benefit from a saving provision allowing them to continue providing cryptoasset services.

The FCA application fee for cryptoasset MLR registration falls in FCA pricing Category 6, is payable via Connect on submission, and is not refunded if the application is withdrawn or refused; a rejected (incomplete) submission may be refunded.

The FCA published its final rules and guidance for the cryptoasset regime on 30 June 2026 (PS26/9 to PS26/13, FG26/5 to FG26/7) and final perimeter guidance PS26/18 on 16 September 2026; the rules apply to firms granted FSMA permission on or after 25 October 2027, and the FCA plans a further perimeter-guidance consultation in late 2026 with final guidance in early 2027.