LONDON
The UK Financial Conduct Authority opened two consultation periods for decentralized finance companies and crypto asset exclusions, following legislative changes and weeks after the agency began accepting applications for its new crypto regulatory regime.
One consultation focuses on how DeFi companies comply with existing FCA rules on money laundering and financial crime. The FCA stated its proposed guidance aims to clarify existing rules rather than establish new policy.
The second addresses specific exclusions from crypto asset regulation. This relates to the broader regulatory regime, which includes provisions for stablecoin holding arrangements and reserve assets, expected to take effect in October 2027.
Applications for entities seeking to operate under the new framework opened Sept. 30. Companies have until Feb. 28, 2027, to submit applications for compliance.
The UK Cryptoasset Business Council said in response that the UK "can still strike the right balance – clear perimeter rules, expectations that stay proportionate, and a framework that lets responsible innovation take root here instead of migrating elsewhere."
For DeFi protocols operating in the UK, the guidance on money laundering and financial crime compliance will set operational requirements. The FCA's specifics on implementation for on-chain entities remain to be detailed.
The exclusions from crypto asset regulation will define which token categories fall outside stablecoin provisions and how different digital assets are classified under the framework.
