UK crypto firms get five

UK crypto firms get five-month window to seek FCA approval

UK crypto firms have been given a five-month application window, from Sep. 30 to Feb. 28, to seek Financial Conduct Authority approval before a new regulatory regime is expected to take effect in October 2027.

The Financial Times published a letter from Zumo founder and CEO Nick Jones, who said the application window gives firms a route into a UK market that some financial institutions had previously considered “too difficult.” In his view, uncertainty over regulation and the risks posed by business partners had held institutions back, even where they understood digital assets and wanted to offer related products.

The FCA’s published timetable puts an exact date on the next step: applications open on Sep. 30, 2026, close on Feb. 28, 2027, and the new regime is expected to begin on Oct. 25, 2027. The regulator opened a pre-application support service in July to help firms prepare before they file.

UK crypto firms must apply for new permissions

Under the incoming rules, a firm carrying out regulated crypto activities will need FCA authorisation or a change to its existing permissions. The FCA says its current crypto oversight has focused mainly on anti-money-laundering registration and financial promotions; the 2027 framework will bring more activities into its financial-services rulebook.

According to the FCA’s final policy statements, an existing registration will not turn into permission under the new regime. Firms already registered under money-laundering rules, as well as companies authorised for other financial services, must apply if their crypto activities fall within the new rules. As crypto.news previously reported, the requirement covers businesses such as trading platforms, custodians, stablecoin issuers and firms offering certain staking services.

Filing during the five-month window also affects whether an existing business can keep operating while its application is assessed. The FCA says firms that apply on time may continue specified activities under transitional provisions if they meet the conditions. Firms applying after Feb. 28, 2027, cannot rely on those provisions and may have to stop the relevant activities until they receive approval. An application itself does not grant permission, and the regulator has not guaranteed a decision on every timely filing before the regime starts.

The rules set requirements for firms’ finances, governance and conduct, alongside activity-specific standards. The FCA’s June policy statements address matters including stablecoin issuance, crypto custody, disclosures when assets are offered or admitted to trading, and controls against market abuse. Applicants can therefore assess the rules for the services they plan to offer, rather than treating authorisation as a single permission for every crypto product.

Financial firms expand access through crypto ETNs

Jones pointed to Hargreaves Lansdown as an example of a traditional investment platform entering the market. The company began offering nine Bitcoin and Ether exchange-traded notes to eligible clients on Sep. 3, as covered on crypto.news. The notes give investors exposure to the assets’ prices; customers do not buy coins directly or control the private keys to them.

Access is limited to clients using the platform’s Advanced Investing service. According to Hargreaves Lansdown’s product details reported by crypto.news, customers must self-certify as advanced investors, pass a test about the products’ risks, and complete a 24-hour cooling-off period. The platform’s launch followed the FCA’s decision to let UK retail investors buy qualifying crypto ETNs from October 2025.

Hargreaves Lansdown’s ETN offering and the coming authorisation process concern different parts of the market. The ETNs are listed investment products already available under FCA rules, while the new application window is for firms seeking permission to carry out activities covered by the 2027 crypto regime. Jones linked the two in his FT letter as evidence, in his assessment, that established financial companies are becoming more willing to develop UK crypto services.

The FCA has also considered another route for investment funds to gain exposure. In June, it proposed a 10% limit on crypto ETN holdings for certain authorised funds, while saying it was not then considering direct crypto ownership by those funds. The proposal was separate from the rules that already let eligible retail customers buy ETNs through investment platforms.

Offshore exchanges face an FCA application decision

For overseas businesses serving UK customers, the authorisation window presents a separate decision about whether to seek permission for covered services. In August, crypto.news reported Binance’s planned bid for an FCA licence, citing a Telegraph report. Binance had not publicly confirmed a filing, and the FCA’s existing restrictions on Binance Markets Limited remained in place.

Jones argued in his FT letter that more firms will need compliant local partners and operating systems as they prepare for UK rules. He described offshore provision and loosely organised business processes as models he expects the industry to move away from. Those are Jones’s expectations, rather than an FCA finding that offshore firms have already changed how they operate.

The US is addressing a different regulatory question. On Aug. 18, the Securities and Exchange Commission proposed rules for certain investment contracts involving crypto assets, including proposed exemptions from securities registration. The proposal remains open to public comment and does not change the FCA’s requirements for firms conducting regulated activities in the UK.

Source: cryptonews.net