FCA opens crypto authorisation window ahead of 2027 rules

The UK Financial Conduct Authority opened applications for cryptoasset authorisation on 30 September, starting the process firms must complete to carry out newly regulated crypto activities under the regime due in 2027. The FCA says the rules are intended to set standards for consumer protection, safeguarding, market integrity and firms’ financial resilience.

What must crypto firms apply for?

Firms seeking to undertake the new regulated activities must apply to the FCA under the Financial Services and Markets Act 2000, or FSMA. Applications go through the FCA’s Connect system. In its announcement opening the crypto authorisation gateway, the regulator said authorisation is not automatic: applicants must show that they meet its requirements, and firms that fail will not be authorised to operate in the UK market.

The application window runs from 30 September 2026 to 28 February 2027. Firms already authorised by the FCA for other regulated activities must apply to vary their existing permissions to include the relevant crypto activities. Firms registered under the Money Laundering Regulations must apply separately; their registration does not convert automatically into FSMA authorisation.

What happens to firms that apply in time?

The new regime begins on 25 October 2027. The FCA expects to decide applications submitted during the window before then. If a decision is still pending when the regime starts, firms that applied during the application period can continue providing cryptoasset services while the application is determined, including taking on new business.

The FCA’s guidance on how the gateway will operate explains that the window is a defined route into the new system, rather than a transfer of existing registration. It is a little like renewing a driving licence under new rules: being on the old register does not itself grant the new permission. The FCA will assess each firm against the standards for the activities it wants to carry out.

What if a firm misses the application window?

Firms can still apply after 28 February 2027, but the FCA says it will not speed up its assessment to make up for a late submission. If a late applicant has not received the required authorisation by 25 October, it will be limited to carrying out regulated crypto activities where needed to fulfil contracts made before it entered the transitional provision; it cannot make new contracts with UK customers. Firms that do not apply must wind down their UK crypto business before the regime starts.

The change is that crypto firms now have a formal application route and a fixed period to use it. The next markers are the 28 February 2027 deadline and the FCA’s decisions on applications before the new regime takes effect on 25 October.

References

• announcement opening the crypto authorisation gateway — fca.org.uk
• FCA’s guidance on how the gateway will operate — fca.org.uk