FCA starts accepting crypto authorization applications ahead of 2027 regime

A new regulatory clock has started for crypto firms operating in the UK, with the Financial Conduct Authority opening its authorization process ahead of a regime that will bring a broader range of digital asset activities under FCA oversight.

Firms that want to continue operating in the country now have until Feb. 28, 2027, to apply ahead of the new rules taking effect Oct. 25, 2027, the regulator said in a statement.

Published earlier this year in June, the regime covers a range of crypto companies, including those that facilitate trading, transactions, staking, and digital asset custody. It also introduces requirements around cryptoasset admissions and disclosures, market abuse, prudential standards and consumer protection.

Emma Banymandhub, CEO of The Payments Association, said in a statement to The Block that the application opening "moves policy into practical delivery" and reflects member calls for "proportionate regulation that protects consumers without unnecessarily constraining innovation and growth."

Rigorous vetting 

The process will not be a rubber stamp. The FCA said firms will have to demonstrate that they meet requirements covering consumer protection, customer-asset safeguarding, market integrity and financial resilience.

That also means existing crypto firms cannot simply carry their current regulatory status into the new system. Registration under the Money Laundering Regulations will not automatically convert into FCA authorization.

Banymandhub urged firms, including those already registered under the Money Laundering Regulations, to treat the process as a fresh authorization exercise. MLR registration will not carry over automatically, she said, adding that firms should be realistic about the standards they will need to meet. She also stressed the importance of a proportionate implementation, particularly for smaller and scaling firms.

"A well-run, proportionate authorisation process will be important to maintaining the UK’s competitiveness and building a trusted market for digital assets," Banymandhub said.

Meanwhile, firms that apply during the application window can continue providing specified cryptoasset services, including taking on new business, while their applications are assessed, provided they meet the relevant transitional conditions, according to the FCA.