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The UK Financial Conduct Authority on Oct. 21 released draft guidance, CP26/36, on when DeFi services fall within the regulatory perimeter. Under the proposal, technology services that merely provide access to decentralized protocols may be exempt from authorization requirements, while services involving subjective intervention, including liquidity route selection or optimization, could be treated as arranging transactions and require authorization.
The guidance said writing code itself would not be regulated, but entities that operate or control a system and earn commercial benefits from it could face regulation following case-by-case assessments. It added that authorized financial firms using DeFi must continue to meet existing compliance obligations, including security and anti-money laundering requirements, even if they do not control the underlying protocol. The consultation runs through Nov. 18, and the full cryptoasset regulatory framework will take effect on Oct. 25, 2027.