Key Insights
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The UK will regulate cryptocurrencies under existing financial laws by October 2027, placing crypto firms under the oversight of the FCA.
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The legislation aims to strengthen consumer protections, improve transparency, and align UK crypto regulation more closely with the United States.
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Officials say the rules will provide clarity for firms, encourage investment, and prevent illicit actors from operating in the UK market.
LONDON, (MarketsXplora) – The United Kingdom plans to bring cryptocurrency companies under existing financial regulations by October 2027, the Treasury said on Monday, in a move aimed at boosting consumer protections, increasing market transparency, and keeping “dodgy actors” out of the market.
The government will introduce legislation in parliament this week that extends the oversight of the Financial Conduct Authority (FCA) to crypto exchanges, dealers, digital wallets, and other firms providing crypto services.
The draft bill, which underwent only minor changes since it was first published in April, seeks to regulate cryptocurrencies in the same way as traditional financial products such as stocks and shares.
UK Crypto Regulation Aligns with the US
Chancellor Rachel Reeves described the initiative as “a crucial step in securing the UK’s position as a world-leading financial centre in the digital age.” She said the legislation will provide firms with “clear rules of the road” to invest, innovate, and create high-skilled jobs, while offering strong consumer protections.
Economic Secretary Lucy Rigby emphasized that the laws are designed to be proportionate and growth-friendly, saying the UK aims “to lead the world in digital asset adoption.” She noted that the government will also explore “mutually beneficial market access opportunities and regulatory alignment” with other countries where appropriate, including the United States. The two nations formed a transatlantic task force in September to explore collaboration on crypto regulations.
The Treasury’s approach aligns with U.S. efforts to carve out digital assets among market regulators, in contrast with the European Union, which implemented the Markets in Cryptoassets (MiCA) framework in 2024. Both the FCA and the Bank of England (BoE) plan to finalize their rules by the end of 2026, with the FCA focusing on trading platforms, decentralized finance, and stablecoins, while the BoE unveiled proposals last month targeting stablecoins used for payments.
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Addressing Risks and Ensuring Accountability
Currently, crypto companies in the UK must register with the FCA primarily for anti-money laundering compliance, including know-your-customer checks and reporting suspicious activity. The new legislation will broaden the FCA’s remit, imposing transparency standards and accountability measures comparable to those for traditional financial products.
Industry experts have welcomed the clarity but raised concerns over technical legal challenges. Natalie Lewis, partner at Travers Smith, told Reuters that she hopes the final legislation will address “quite a few technical legal problems” in the original draft. Daniel Slutzkin, head of UK at crypto exchange Gemini, said firms have “long awaited regulatory clarity” and can now prepare to meet the new standards.
The Treasury also plans to restrict political donations in cryptocurrencies, following concerns over the traceability of such contributions. Reform UK, led by Nigel Farage, recently became the first British political party to accept crypto donations, including a £9 million contribution from cryptocurrency investor Christopher Harborne.
The government cited growing consumer risks as a key driver for regulation. Data from October indicated a 55% rise in investment scams in the UK over the previous year, with fraudulent cryptocurrency schemes topping the list. Notably, a Chinese woman, Zhimin Qian (also known as Yadi Zhang), was convicted in September for orchestrating a multibillion-pound bitcoin fraud, which included what the Metropolitan Police believe to be the largest single cryptocurrency seizure in the world.
Reeves said the upcoming rules would help detect suspicious activity, enforce sanctions, and hold companies accountable, offering greater transparency and security for millions of investors while deterring illicit actors.
The legislation follows the recent Property (Digital Assets etc.) Act 2025, which legally recognized digital assets as property in the UK, signaling a broader effort to integrate cryptocurrencies into the formal financial system.