FCA maps out crypto authorization rules as UK funds £500M laundering crackdown

Crypto is high on the priority list of UK regulators this week as the Financial Conduct Authority (FCA) spelled out which crypto activities need authorization once the country’s regime takes effect in 2027, in the final guidance it put out on Wednesday, September 16. 

The guidance landed within a day of the Home Office and HM Treasury committing £500 million over three years to combat a money laundering headache escalated by AI and crypto.

The FCA advised firms, including overseas outlets serving UK consumers, e-money issuers, and traditional finance firms testing crypto markets, to seek independent legal advice if they have to to work out the permissions they need.

What the FCA’s final guidance tells crypto firms to check

The FCA, in the policy statement PS26/18, listed the activities within the scope of the UK’s future cryptoasset regime. The regime rests on the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, which Parliament passed on February 4.

The regulator warned firms, including those issuing qualifying stablecoins, running trading platforms, dealing and arranging deals, safeguarding customer cryptoassets, and arranging staking, not to assume that their current status carries over. 

For example, being registered under the Money Laundering Regulations does not automatically confer full authorization under the Financial Services and Markets Act. 

“We are building a crypto regime that firms, consumers and international partners can trust,” said David Geale, the FCA’s executive director of consumers, payments and competition, adding that the guidance gives firms “the clarity they’ve asked for.” 

When does the FCA authorization gateway open for crypto firms? 

The FCA’s authorization gateway opens on September 30, according to the regulator, and firms that apply before February 28, 2027, can use the transitional arrangements. Firms that miss the window and the transitional provisions may have to pause operations until they secure appropriate clearance. 

The full regime takes effect on October 25, 2027.

The FCA has another consultation scheduled for October, covering stablecoins, proprietary trading, certain technology providers, decentralized protocols and financial promotions.

UK unveils £500 million money laundering task force

The Home Office and HM Treasury unveiled their own £500 million enforcement push on Tuesday, enlisting 500 new officers from the police forces, the National Crime Agency and the Crown Prosecution Service. The funding for the Anti-Money Laundering and Asset Recovery Strategy is expected to be drawn from the economic crime levy on regulated firms over three years. 

The Home Office noted how the money laundering problem, which the NCA estimates at more than £100 billion moving through UK or British corporate structures every year, “has grown in recent years from the rise of fintech, crypto and AI.” 

Home Secretary Shabana Mahmood put “the criminal bosses behind organised crime” on the program’s hit list, rather than going after their foot soldiers.

Where crypto fits the crackdown

Crypto is not incidental to the strategy. The new officers build on Operation Destabilise, the NCA’s investigation into Russian-speaking networks that turn street cash into crypto for organized crime. 

GOV.UK put the operation’s running tally at 119 suspected launderers arrested and more than £25 million in cash and crypto seized in under a year. Cryptoassets rank third on the nine economic crime priorities the NCA agreed with the Treasury and the FCA.

The FCA is set to take on a bigger role in that fight. Spotlight on Corruption, an anti-corruption charity, said the strategy would turn the regulator into an AML “super-regulator” for lawyers, accountants and company formation agents. 

The FCA’s Steve Smart, its enforcement and market oversight director, backed the plan, saying “a whole-system effort, both at home and abroad, is the only way we can crack down on organised crime.”