LONDON — The UK's Financial Conduct Authority opened two consultation periods on decentralized finance compliance and crypto asset exclusions under its updated regulatory framework.
One consultation clarifies how DeFi protocols and operators can meet the FCA's existing anti-money laundering and financial crime rules. The FCA characterized this guidance as a clarification of current regulations rather than new policy.
A second consultation addresses exclusions from cryptoasset regulation under the UK's updated legislative framework for digital assets.
The UK Cryptoasset Business Council said DeFi represents "among the most innovative parts" of the financial services sector and called for clear perimeter rules and proportionate expectations. The council warned that "responsible innovation" must be allowed to develop in the UK "instead of migrating elsewhere."
The consultations align with the FCA's new crypto regulatory regime, which includes provisions for stablecoin reserve arrangements and holding structures. The framework takes effect in October 2027.
The FCA began accepting applications from crypto entities on Sept. 30. The application deadline is Feb. 28, 2027.
