UK: FCA consults on cryptoasset perimeter guidance

Why should I read this?

From 25 October 2027, the Financial Services and Markets Act 2000 (Cryptoasset) Regulations 2026 (SI 2026/102) (the “Cryptoasset Regulations”) will bring cryptoassets within the scope of regulation under the Financial Services and Markets Act 2000 for the first time.  Firms carrying on these activities by way of business in the UK will, as from that date, need to be authorised (or exempt) to do so.

To assist firms to understand its interpretation of the perimeter applicable to these new regulated activities, the FCA has published consultation paper CP26/13 “Cryptoasset Perimeter Guidance”.  The paper sets out draft guidance on when a firm will need authorisation to carry on cryptoasset activities under the new regulatory regime. 

The proposed guidance will sit in a new chapter of PERG (PERG 19) in the FCA Handbook.  It covers the new regulated activities, new specified investments, relevant exclusions and issues around the location from which the activity is carried on.  It also explains how the new perimeter interacts with the existing cryptoasset-related regime contained in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the “MLRs”).

CP26/13 is relevant to any firm that carries on, or plans to carry on, cryptoasset activities in the UK.  This includes trading platforms, dealers, custodians, stablecoin issuers and staking providers.  The consultation closes on 3 June 2026. The consultation will be especially relevant for any firm which is not yet certain as to whether, or in respect of which activities, it will need to be authorised from October 2027, given that such firms should already be starting to think about their approach to putting together relevant applications.

See our previous client briefings:

• UK: FCA consultation on application of the FCA Handbook to cryptoasset firms - context and categorisation
• UK: FCA consultation on application of the FCA Handbook to cryptoasset firms – high level standards
• UK: FCA consults on application of the FCA Handbook to cryptoasset firms – operational resilience
• UK: FCA consults on application of the FCA Handbook to cryptoasset firms – Consumer Duty
• FCA consultation on a prudential regime for cryptoasset firms

What do I need to know about CP26/13?

New regulated activities

Cryptoasset lending and borrowing is not a separate regulated activity. However, transactions involved will often amount to dealing or arranging. Firms offering these services should assess which permissions they need.

Key concepts

Territorial scope and overseas firms

The Cryptoasset Regulations amend section 418 of FSMA to provide additional examples of circumstances in which a person will be deemed to be carrying on regulated activities in the UK.

Significantly, these will extend the regulatory perimeter to .circumstances in which a person outside the UK offers cryptoassets to UK consumers, or provides custody or staking services to such consumers, if there is no UK authorised person intermediating the relevant transaction.

This is a material departure and is something which is made clear in the FCA’s draft guidance.

The FCA expects firms to operate from a UK legal entity.  However, overseas firms that deal only with UK institutional clients will not generally need authorisation.  This applies where those clients do not act as intermediaries between the firm and UK consumers.

The fact that an arrangement involves smart contracts, public blockchains or some elements of decentralisation does not determine the perimeter position or place the arrangement outside of regulation. The key question is whether an identifiable person carries on a regulated activity by way of business in the UK.

Exclusions

Firms should not assume that exclusions from traditional regulated activities carry over to the new cryptoasset activities.  Only a small number of exclusions currently available under the Financial Services and Markets Act 2000 (Regulated Activities) Order will apply in respect of regulated cryptoasset activities.

Interaction with the MLRs

Firms already registered with the FCA in respect of cryptoasset activities under the MLRs must still obtain authorisation under FSMA if their (existing or new) activities fall within the new perimeter.  Cryptoasset firms authorised under FSMA will, conversely, still need to comply with the MLRs, but they will not need a separate registration under the MLRs.

What should I do?

What else do I need to know about the cryptoasset perimeter?

CP26/13 is part of a wider programme of consultation on the new cryptoasset regime.  The FCA has also consulted on stablecoin issuance and custody, the application of the FCA Handbook, trading platforms, intermediaries and prudential rules.  It plans to publish final rules for all cryptoasset consultations in 2026.

Firms registered under the MLRs can continue to operate under savings provisions while their application is being determined. 

Timothy Fosh, Financial Services partner at Eversheds Sutherland, comments:

"The guidance makes clear that substance matters more than labels. Firms should not underestimate the breadth of the new perimeter or the absence of an overseas persons exclusion. Those who will be providing any dealing in cryptoassets, where there is any nexus to the UK, should now finalise their analysis of whether this will involve carrying on regulated activities and start to prepare their authorisation applications, if they have not already."

Next steps

The consultation closes on 3 June 2026.  Responses can be submitted by email to cp26-13@fca.org.uk.

How Eversheds Sutherland can help

We offer specialised advice on the safekeeping of cryptoassets, exchanges and compliance with international regulations.  Our services include guidance on custody models and infrastructure for cryptoassets, as well as advice on legal and regulatory matters.  We support investment managers, custodians and token issuers with regulatory frameworks.  Our cybersecurity team works with our award-winning cryptoassets team to protect assets and mitigate cyber risks.