UK Treasury Plans to Bring Crypto Firms Under Full FCA Oversight by Late 2027
The UK Treasury aims to bring cryptocurrency firms fully under the regulatory oversight of the Financial Conduct Authority (FCA), with legislation expected to be introduced by October 2027 and coming into force by late 2027. This new framework would extend regulation beyond current anti-money laundering (AML) registration requirements to cover disclosures, governance, consumer protection, and place crypto services under the FCA in a similar manner to traditional financial products.
Currently, UK crypto firms are primarily regulated through AML registration, but the proposed comprehensive regulatory perimeter seeks to address fraud risks and close existing regulatory gaps as crypto activities become more integrated with mainstream finance. The move is also intended to bolster the UK's status as a leading financial center.
UK Chancellor of the Exchequer Rachel Reeves described the plan as crucial for promoting growth, safeguarding consumers, and maintaining the United Kingdom's competitiveness in the financial sector.
The proposed reforms may significantly impact the industry, particularly startups, which could face higher costs and more complex compliance demands from inception. These requirements may affect product design, governance structures, and operational resilience. Experts view these changes as marking a structural shift in how crypto startups are treated, potentially increasing their credibility. However, they also caution that the added regulatory burden could slow the speed to market if compliance becomes onerous.
