UK FCA Consults on DeFi Rules and Cryptoasset Exclusions

The UK Financial Conduct Authority (FCA) has opened two consultation periods covering decentralized finance compliance and exclusions from cryptoasset regulation. The proposals follow recent changes to UK legislation and come shortly after the regulator began accepting applications from companies entering its new crypto regulatory regime.

The FCA’s DeFi guidance is intended to clarify how companies should comply with existing anti-money-laundering and financial-crime requirements rather than impose a new policy. The UK Cryptoasset Business Council welcomed the review but warned that the FCA must maintain clear boundaries and proportionate rules so responsible crypto businesses can innovate in Britain instead of moving overseas.

A separate consultation concerns which cryptoassets may be excluded from parts of the regulatory framework, including arrangements involving stablecoin holdings and reserve assets. The FCA opened applications for crypto entities on Sept. 30, giving companies until Feb. 28, 2027, to seek compliance under the regime, which is expected to take effect in October 2027.