UK crypto regime: FCA confirms five-month window for applications

Firms should start preparing now for the UK’s cryptoasset regulatory regime, according to the Financial Conduct Authority. Doing so will enable businesses providing crypto services to take advantage of the FCA’s application period. Applying during this period (30 September 2026 to 28 February 2027) will give firms confidence about their ability to continue carrying on crypto activities in the UK.

Opening the door to crypto licence applications

When the new regulatory regime starts to apply on 25 October 2027, firms providing regulated crypto activities in the UK will need to be authorised by the FCA. Failing to do so risks breaking the law.

To be ready in time, firms will need to apply to the FCA. Firms that are already licensed under the Financial Services and Markets Act will need to update their existing permissions. All other firms will need to apply for a new licence.

The FCA will open its gateway to start receiving applications on 30 September 2026. This is the earliest date on which firms can apply for a crypto licence or variation of permission (VoP). It is also the start of the application period.

The FCA has said it will process applications in time for the new regime if they are made during the application period. The application period ends on 28 February 2027. Firms can still apply after this date but will not benefit from the advantages of the application period.

Why firms should apply during the application period

Applying during the application period gives firms more assurance about what happens next. It is the only route for firms to benefit from the smoothest transition into the new regime.

Firms that apply during the application period should know whether the FCA has granted them a licence before the regime starts to apply. Even if the FCA has not granted a licence in time, this group of firms can continue running their crypto business in the UK after the go-live date while the application process is ongoing.

The only other option for firms carrying on crypto activities in the UK is to apply after the application period but before the regime goes live. This group of firms will be restricted in what they can do after 25 October 2027 until their application is determined. They will not be permitted to not take on new customers or provide new business for existing customers.

The FCA expects firms that do not apply for a licence to wind down their UK crypto business before the new regime commences. This means that firms that plan to close their relevant UK activities in the long run should still considering applying to the FCA. Doing so would give them more time to run off their existing business.

Next steps

The FCA is still developing its rulebook for cryptoasset activities. Three open consultations close on 12 February (read: FCA drafts more UK crypto regulation) and a fourth closes on 12 March (read: FCA returns with more detail on how its rules will apply to UK-regulated crypto activities).

Even while the final rules are still to be set, the FCA is encouraging firms to start preparing for the regime now. It is planning a series of events over the coming months to help firms understand its expectations and invites firms to meet with the FCA as part of its pre-application support service.