UK Moves to Bring Crypto Firms Under Financial Services Law

Source: DefiPlanet Original Title: UK Moves to Bring Crypto Firms Under Financial Services Law Original Link: https://defi-planet.com/2025/12/uk-moves-to-bring-crypto-firms-under-financial-services-law/

Quick Breakdown

• UK to regulate crypto firms under existing financial services laws, placing them under full FCA supervision by 2027
• The government says clear rules will support innovation, strengthen consumer protection, and curb bad actors.
• Framework aligns UK crypto policy more closely with U.S. and global regulatory standards.

UK Regulatory Shift

UK lawmakers are moving to bring cryptocurrency companies fully within the country’s financial services regime, signalling a decisive shift toward comprehensive oversight of the digital asset sector. Draft legislation is expected to be introduced in Parliament this week, with full implementation targeted for October 2027, according to briefings from the finance ministry.

If passed, the bill would place crypto firms operating in the UK under the supervision of the Financial Conduct Authority, extending governance, consumer protection, and operational resilience standards already applied to traditional financial institutions. The proposal marks a clear departure from the UK’s current, piecemeal approach to crypto regulation.

Regulation Framed as a Growth Catalyst

Chancellor Rachel Reeves has positioned the legislation as a strategic economic move rather than a restrictive clampdown, arguing that regulatory clarity is essential to securing the UK’s role in the global digital economy. Treasury officials say the framework is designed to provide legal certainty for firms while reducing systemic and consumer risks tied to unregulated crypto activity.

Under FCA oversight, crypto companies would be required to meet stricter standards around internal controls, disclosures, safeguarding of client assets, and financial resilience. Policymakers argue this approach will deter bad actors while allowing compliant firms to scale responsibly within the UK market.

Aligning the UK with Global Crypto Policy

The legislation would bring the UK closer to regulatory initiatives underway in the United States and the European Union, where lawmakers are also working toward unified crypto market frameworks.

Treasury minister Lucy Rigby described the bill as a milestone in the UK’s digital asset strategy, emphasizing that the rules would be “proportionate and fair” while supporting long-term innovation. She added that closer alignment with international partners could improve cross-border market access for UK-based crypto firms.

The move follows a broader regulatory push by the Financial Conduct Authority, which announced a sweeping reform package in December 2025 to remove structural barriers that have limited retail participation in regulated investments.