Crypto: the UK’s new regulatory framework

6 Feb

On 4 February 2026, the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) (the Regulations) were published. The Regulations will commence on 25 October 2027, although provisions enabling the FCA to issue directions, guidance and rules will come into force sooner. In brief the key principles embodied in the Regulations are:

1. Adoption of the ‘same risk, same outcome’ approach to regulation

The core principle embodied in the Regulations is "same risk, same regulatory outcome," meaning cryptoassets will generally be regulated consistently with traditional finance. The new rules amend the Financial Services and Markets Act 2000 to bring specific crypto activities within the UK’s financial services regulatory sphere.

2. New regulated activities

Firms carrying out the following activities in the UK (or for UK clients) will now require authorization from the Financial Conduct Authority (FCA):

Issuing Stablecoins: Issuing ‘qualifying stablecoins’ (tokens backed by assets to maintain a stable value) in the UK.

Safeguarding (custody): safeguarding cryptoassets on behalf of others.
Operating Trading Platforms: running exchanges where buyers and sellers of cryptoassets interact.
Dealing and Arranging: buying or selling cryptoassets as a principal or agent, or arranging these deals.
Staking: making arrangements for cryptoasset staking (validating blockchain transactions).

3. Consumer Protection and Market Integrity

The framework introduces strict new rules to protect investors and ensure fair markets:

Market Abuse Regime: insider dealing, unlawful disclosure of inside information, and market manipulation are defined and in turn, prohibited. This includes banning behaviors like creating false price signals or ‘disruptive trading’.
Public Offers & Disclosures: Offering cryptoassets to the public is generally prohibited unless specific exemptions apply (e.g., offers to institutional investors). Permitted public offers must provide comprehensive "disclosure documents" to help investors make informed decisions.
Liability: Those responsible for disclosure documents can be held liable for untrue or misleading statements.

4. Key Definitions

The main categories of regulated assets are defined as ‘qualifying cryptoassets’, ‘qualifying stablecoin’ and ‘specified investment cryptoassets’. Broadly, these are fungible and transferable digital assets, distinguishing them from things like NFTs (which are often unique) or mere digital records. The Regulations specifically include stablecoins but excludes tokenised versions of existing investments like traditional stocks (which are already regulated).

5. Commencement

While the legislation sets the framework, full commencement is scheduled for Monday, 25 October 2027. This delay is intended to allow the Financial Conduct Authority time to finalise and issue detailed rules and guidance before firms must be fully compliant.

Liam Hemmings