The UK Treasury plans to finalise a regulatory framework for cryptocurrencies by 2027 that will bring the sector under full supervision of the Financial Conduct Authority (FCA). The move is intended to align digital-asset markets more closely with traditional financial services, strengthen consumer protections and tighten measures to detect and punish financial crime.
Officials say the new rules, expected to be completed by late 2027 with a final rulebook targeted by mid-2026, will narrow a long-standing protection gap in a rapidly growing sector that has largely operated in a loosely regulated environment. The government and regulators argue clearer requirements will reduce fraud, improve market transparency and give firms the certainty they need to invest and innovate in the UK.
Rising consumer interest in crypto has been accompanied by growing losses. UK Finance data shows a 55% increase in funds lost to crypto-related scams over the past year. The UK also recorded its largest-ever Bitcoin seizure after the prosecution of Zhimin Qian, who reportedly defrauded more than 128,000 people; authorities recovered 61,000 BTC — worth more than £5 billion — in what was described as the biggest crypto confiscation in British history.
Officials and ministers say the rules are designed both to protect consumers and to foster industry growth. They say clearer requirements will improve detection of suspicious activity, enable stronger sanctions against wrongdoers and hold firms to account, helping to lock ‘dodgy actors’ out of the UK market while encouraging legitimate firms to invest and create jobs. UK Chancellor Rachel Reeves said the framework will provide “the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections.”
An FCA consultation paper published in September proposed that crypto-facing firms meet stringent standards addressing sector-specific risks, including operational resilience, prevention of financial crime and senior management accountability. The FCA acknowledged that some inherent risks in crypto markets, such as price volatility, may remain, but ministers say a proportionate and fair set of rules will support adoption and growth.
City Minister Lucy Rigby said bringing forward the legislation is “a milestone,” and stressed the government’s aim to be a global leader in digital asset adoption. Rigby is expected to table secondary legislation imminently to progress the timetable toward a final rulebook and full implementation in 2027.
The FCA has already accelerated its own preparations: it has shortened registration assessments for crypto firms from more than a year to an average of five months, and approval rates have risen to roughly 45% in recent months compared with an average below 15% over the past five years. Regulators say these operational changes, combined with the forthcoming legal framework, should make the UK a safer and more attractive market for digital-asset activity.