On the 30th of September 2026, the FCA opened the gateway for cryptoasset authorisation, ahead of the UK’s new cryptoasset regime coming into force on 25th of October 2027. In preparation, the FCA has published several papers, including finalised guidance setting out its approach to overseas cryptoasset firms, seeking to provide regulated cryptoasset services in the UK, who will require FCA authorisation.
The key points for international firms are as follows:
- Generally, if a crypto firm wants FCA authorisation to carry on regulated cryptoasset activities in the UK, the FCA expects those activities to be carried out through a UK legal entity.
- An overseas firm wanting to operate a Qualifying Cryptoasset Trading Platform (QCATP) may be allowed to serve UK customers through a UK branch rather than setting up a separate UK legal entity. Through this exception, the FCA aims to facilitate access to global liquidity pools resulting in better outcomes for customers.
- When assessing an application, the FCA will pay regards to supervisory cooperation with an overseas’ firm’s home state regulator.
- As with other international firms, the FCA expects senior managers involved in the crypto firms’ UK activities to spend an adequate and proportionate amount of time in the UK. The FCA also expects an “appropriate amount of control function activity, leadership and decision-making” to be in the UK.
- The FCA is clear that if a cryptoasset business has automated blockchain based decentralised features, it does not automatically fall outside of the regulatory perimeter. The key question to ask is whether there is an identifiable person whose business includes carrying on the relevant activity in the UK. Combined with other factors this will be important in assessing whether an activity falls within the UK’s regulatory perimeter.
- FCA’s proposed perimeter guidance in Consultation Paper 26/13 states that under the new cryptoasset regulations, Overseas Persons Exclusions (OPE) will not apply. However, an overseas dealer will not be carrying out a regulated activity in the UK where it deals with 1) a UK-authorised firm that has permission to deal in qualifying cryptoassets as principal, or 2) a UK-authorised QCATP operator.
- Remember, not all international firms will require authorisation from the FCA. Consider if the nature and scope of the activities of your firm fall within the regulatory perimeter. Also check if any exclusions are available.
What about financial promotions as an International Cryptoasset Firm?
- Since the 8th of October 2023, UK and overseas cryptoasset firms marketing to UK customers have needed to comply with the financial promotion regime. Under Article 73ZA of the Financial Promotion Order (FPO), firms registered with the FCA under the Money Laundering Regulations (MLRs) can communicate their own qualifying cryptoasset financial promotions without obtaining approval from an FCA authorised person.
- The existing FPO exemption for certain cryptoasset promotions will be withdrawn when the new cryptoasset regulatory regime takes effect.
- Unless an FPO exemption applies, cryptoasset businesses that are not authorised under FSMA must have their financial promotions approved by an authorised person before communicating them. The former Article 73ZA route will no longer be available.
- Firms authorised to carry on the new regulated cryptoasset activities will be able to approve their own financial promotions.
- Businesses currently using another authorised firm to approve their promotions will need to obtain the relevant FSMA authorisation if they wish to continue carrying on cryptoasset activities in or to the UK once the new regime commences. An exemption may provide a separate lawful route for communicating particular promotions, but it will not remove any requirement for authorisation of the underlying activity.
Capital view
The upcoming cryptoasset regime brings much needed certainty to UK and overseas firms and allows for future planning. However, going forward, firms will also be expected to meet higher standards in order to comply with the new regime.
Cryptoasset firms targeting UK customers should review their existing business models in light of the upcoming regulations and seek specialist advice to ensure that they are compliant with the UK’s cryptoasset regime when it comes into force.
How can we help?
For further information about issues raised in this article, please contact a member of our Cryptoassets team.
Rachel Hillier
Partner
Business Crime and Investigations, Consumer Credit, Cryptoassets, Financial Services, FinTech
Rachel is a partner and leads our Financial Services team, providing financial services regulatory advice to innovative Fintech clients and traditional financial services firms. She is an experienc... Read More
Ankit is a Solicitor in our Financial Services team. Prior to joining Capital, Ankit acquired his qualifying work experience in the Financial Services Regulatory team of a City law firm and complet... Read More
Drew is a Trainee Solicitor in our Financial Services team. Drew studied LLB Law at the University of Birmingham.... Read More
