The UK's Financial Conduct Authority announced two consultation periods this week on decentralized finance and crypto asset regulation, aimed at clarifying compliance pathways for DeFi operators and defining exclusions for certain digital assets under new legislative changes.
The first consultation addresses how DeFi companies must adhere to the FCA's existing financial crime and anti-money-laundering rules. The agency said the proposed guidance clarifies established rules rather than introducing new policy.
The second consultation covers exclusions from cryptoasset regulation, following recent UK legislative changes that redefined the scope of digital asset oversight.
The consultations come weeks after the FCA opened applications for its new crypto regulatory regime, set for enforcement in Oct. 2027. Companies must apply by Feb. 28, 2027. The framework includes provisions for stablecoin reserve arrangements and holding structures.
The UK Cryptoasset Business Council said DeFi's innovation requires "clear perimeter rules, expectations that stay proportionate, and a framework that lets responsible innovation take root here instead of migrating elsewhere."
The FCA has separately sanctioned three crypto exchanges for handling Russian illicit funds, signaling sustained focus on financial crime enforcement in digital assets.
