FCA Tells UK Crypto Firms: License to Grill 🍢

The United Kingdom's Financial Conduct Authority (FCA) opened applications Wednesday for crypto businesses seeking authorization under a regulatory regime due to take effect on Oct. 25, 2027, requiring firms to file by the end of February 2027. The framework expands the FCA's oversight beyond anti-money laundering and financial promotion requirements, with the regulator finalizing its rules in June to cover stablecoin issuance, crypto trading platforms and market abuse. The FCA expects to decide applications submitted during the window before the regime takes effect. "The UK's new crypto regime will give consumers greater protections and firms a clear framework to operate in. Firms can now apply for authorization and start preparing for regulation," said Dominic Cashman, the FCA's director of authorization.

Any UK crypto exchange that fails to win a full licence from the FCA by Oct. 25, 2027, will have to stop offering regulated crypto services, according to the regulator's gateway guidance. Firms that apply on time can keep serving customers, including new ones, while the FCA decides their applications, but late applicants receive no fast track. Without a licence when the rules start, those firms can only honor existing contracts and cannot sign new customers or new deals with current ones, while firms that never apply must wind down their UK business before Oct. 25, 2027, or risk carrying on unauthorized financial activity. Each applicant will be judged on consumer protection, custody safeguards, market integrity, and financial resilience, and approval is not automatic.

An existing anti-money laundering registration will not convert into a license, and every firm must apply from scratch. Emma Banymandhub, CEO of payments industry trade body The Payments Association, welcomed the opening but urged businesses already registered under money laundering regulations to treat it as a fresh authorization process. "MLR registration will not carry over, and firms should be realistic about the standards they will need to meet," she said in comments shared with Cointelegraph, adding that implementation would be particularly important for smaller and growing businesses.

The licensing push comes as British lenders and crypto firms continue to clash over payments, with UK Finance ejecting Coinbase from the banking lobby last week, though the exchange can appeal. Earlier approvals have already arrived with limits, as Robinhood's August UK crypto approval let it pass orders to others but not hold customer coins. The next five months will determine which exchanges pursue a full UK licence, with the FCA expecting to rule on timely applications before October 2027.