UK Cryptoasset Regulatory Regime: AML Registration, Financial Promotions and FSMA
- Issuing authority
- Financial Conduct Authority (FCA) / HM Treasury
- Effective date
- The current framework has developed in stages: 10 January 2020: FCA AML/CTF registration regime for cryptoasset businesses began. 1 September 2023: UK cryptoasset Travel Rule took effect. 8 October 2023: Cryptoasset financial promotions regime took effect. 25 October 2027: New comprehensive FSMA cryptoasset regulatory regime begins.
- Scope
- UK
Quick Summary
The UK currently regulates cryptoassets through several overlapping regimes. Cryptoasset businesses carrying out activities covered by the Money Laundering Regulations must register with the FCA and comply with AML/CTF requirements. Crypto promotions to UK consumers are subject to specific financial promotion rules, while cryptoasset transfers are also covered by the UK Travel Rule. A much broader regulatory framework has now been established under FSMA. From 25 October 2027, firms carrying out newly regulated cryptoasset activities will generally need FCA authorisation rather than relying on the existing AML registration regime alone.
Who does it apply to?
- Cryptoasset exchanges
- Custodian wallet providers
- Firms marketing cryptoassets to UK consumers
- Businesses carrying out activities covered by the new FSMA crypto regime
Why does it matter?
FCA registration under the current MLR regime is primarily about AML/CTF compliance. It is not the same as being fully authorised by the FCA to provide regulated financial services. That distinction becomes increasingly important from October 2027. Businesses carrying out activities within the new crypto regulatory perimeter will generally need FCA authorisation and will face broader financial-services requirements alongside their AML obligations. Note that the financial promotions regime can apply to overseas firms marketing cryptoassets to UK consumers, even where the firm is not based in the UK.
What it means
Being registered with the FCA under the Money Laundering Regulations does not mean a crypto business is fully FCA authorised. The existing registration regime focuses primarily on AML/CTF supervision. From 25 October 2027, that changes significantly. Firms conducting activities brought within the new regulatory perimeter will generally need FCA authorisation and will enter a much broader financial-services regulatory framework. There is another common misconception around financial promotions. It is not correct to say that only FCA-authorised firms can market cryptoassets. Since October 2023, there have been several lawful routes for communicating crypto promotions. These include communication by an authorised person, approval by an authorised person where permitted, communication by an FCA-registered cryptoasset business in the circumstances allowed by the regime, or reliance on an applicable exemption. Promotions must also comply with FCA requirements such as being fair, clear and not misleading.