The UK Treasury aims to finalise cryptocurrency regulations by late 2027, bringing the sector under a regulatory framework aligned with traditional financial markets and placing it under full supervision of the Financial Conduct Authority (FCA).
Summary
– The Treasury plans to finalise rules by late 2027, subjecting crypto firms to FCA oversight.
– Regulators expect the framework to curb financial crime and improve detection and sanctions of suspicious activity.
The Guardian reports the rapidly growing crypto sector, long operating in a loosely regulated environment, would be formally overseen by the FCA. Under this supervision, crypto markets would gain stronger consumer protections that the digital-asset industry currently lacks, narrowing a noted protection gap.
Rising consumer interest in crypto has coincided with increased fraud and investment losses. UK Finance data shows a 55% rise in funds lost to crypto-related scams over the past year. The UK also recently recorded its largest Bitcoin seizure after prosecuting Zhimin Qian, who defrauded over 128,000 people and had been hiding proceeds in the UK; authorities recovered 61,000 BTC—worth more than £5 billion—marking the biggest crypto confiscation in British history.
Rules to promote growth
Officials say the rules will make the market more transparent, improve detection of suspicious activity, enable stronger sanctions, and hold firms accountable—positioning the UK as a hub for digital-asset innovation. “By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market,” UK Chancellor Rachel Reeves said.
An FCA consultation paper from September proposed that crypto-facing firms meet stringent standards targeting sector-specific risks, including operational resilience, financial crime prevention, and senior management accountability. While the FCA noted inherent risks like volatility may remain, City Minister Lucy Rigby said the framework would support growth: “Bringing forward this legislation is a milestone. Our intention is to lead the world in digital asset adoption. The rules we are putting in place are going to be proportionate and fair. They are going to be good for growth, encourage firms to invest here and protect consumers as well.”
Rigby is expected to table secondary legislation on Monday, aiming for a final rulebook by mid-2026 and full implementation in 2027.
The FCA has already accelerated its readiness efforts by shortening its registration timeline—from over a year to an average of five months. Approval rates for crypto firms have improved to about 45% in recent months, compared with an average below 15% over the past five years.
