UK Regulator Intends to Start Authorizing Crypto Firms in 2026

The UK's Financial Conduct Authority (FCA) plans to introduce a new authorization regime for crypto firms by 2026, marking a significant shift from the current anti-money laundering (AML) registration process. This change aims to create a more stringent regulatory environment for the crypto industry.

The FCA will implement a gateway regime that allows for the authorization of crypto firms, requiring them to meet stricter standards than the current AML registration.

The new regime will cover a broader range of activities.

The FCA will release policy papers throughout 2025 on these topics, with the full regime expected to go live after final policy papers are published in 2026.

Many firms, even those currently registered, may need to reapply for authorization under the new system.

Since 2020, only 50 out of 368 firms (14%) have been approved under the current AML register.

Despite regulatory challenges, crypto adoption in the UK is increasing, with 12% of adults now owning crypto.

The new regime is expected to enhance transparency and security for investors while fostering innovation in the UK's crypto sector.

It positions the UK as a leader in crypto regulation, potentially making it an attractive destination for crypto businesses and investors. However, the stricter requirements may pose challenges for some firms, necessitating significant compliance efforts.

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