The UK Financial Conduct Authority initiated two consultation periods on its digital asset regulations, addressing DeFi money laundering compliance and exclusions for specific crypto assets.

The consultations follow the FCA's opening of applications under its new crypto regulatory regime on Sept. 30, with a Feb. 28, 2027 deadline. The agency published the notices on Oct. 21.

The first consultation focuses on clarifying existing money laundering and financial crime guidance for DeFi companies. The FCA emphasized the guidance clarifies existing rules rather than establishing new policy.

The second consultation addresses exclusions from cryptoasset regulation, directly reflecting recent legislative changes to the UK's regulatory framework. The broader regime includes provisions for stablecoin holding arrangements and reserve assets, with enforcement set to begin in October 2027.

The UK Cryptoasset Business Council said DeFi represents among the most innovative sectors in financial services and called for proportionate regulation that prevents innovation from migrating overseas. "The FCA needs to get this right," the Council said in a statement.