The UK Financial Conduct Authority has launched two consultation processes tied to the country’s evolving crypto rulebook, one focused on how decentralized finance firms can comply with anti-money laundering and financial crime requirements, and another covering exclusions from cryptoasset regulation following recent legislative changes. The regulator said its proposed DeFi guidance is meant to clarify existing rules rather than create a new policy framework. The move comes only weeks after the FCA opened applications for firms seeking to operate under the UK’s new crypto regulatory regime. The broader framework referenced by the agency includes stablecoin holding arrangements and reserve assets, and is expected to take effect in October 2027. Companies seeking compliance under the regime have until Feb. 28, 2027, after applications opened on Sept. 30. The UK Cryptoasset Business Council said DeFi remains one of the most innovative areas in financial services and urged the FCA to strike a balance between clear regulatory boundaries, proportionate expectations and room for responsible innovation.
The UK Financial Conduct Authority has opened two consultation periods covering decentralized finance compliance and exclusions for certain crypto assets after what it described as recent legislative changes.
In a notice published Wednesday, the FCA said one consultation is aimed at helping companies using decentralized finance, or DeFi, comply with the watchdog’s rules on money laundering and financial crime. A second consultation covers exclusions from cryptoasset regulation.
FCA says DeFi proposal clarifies existing rules
On the DeFi side, the regulator said the proposed guidance "seeks to clarify existing rules rather than establish new policy."
The UK Cryptoasset Business Council responded to the consultations by saying: "DeFi sits among the most innovative parts of [Financial Services]. The UK can still strike the right balance - clear perimeter rules, expectations that stay proportionate, and a framework that lets responsible innovation take root here instead of migrating elsewhere [...] the FCA needs to get this right."
Broader crypto regime points to 2027 rollout
The exclusions consultation refers to the FCA’s previously announced regulatory regime, which includes stablecoin holding arrangements and reserve assets. That framework is expected to be enforced starting in October 2027.
The FCA opened applications for crypto entities on Sept. 30. Companies seeking to comply with the rules face a Feb. 28, 2027 deadline.
The consultations were announced only weeks after the agency began accepting applications under its new crypto regulatory regime.
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