UK FCA: Final Phase of Crypto Regulation Consultation
📋 TL;DR
- The UK FCA enters the final phase of its crypto regulation consultation with a deadline of March 12, 2026
- The new authorization regime will open in September 2026, with mandatory licensing by October 2027
- The “Consumer Duty” will require platforms to act in clients’ best interests and avoid foreseeable harm
- Staking and DeFi will be regulated with minimum capital requirements of £75,000 to £750,000
- Unlike MiCA in Europe, the UK is creating its own post-Brexit framework
The United Kingdom is taking a decisive step in cryptocurrency regulation. The Financial Conduct Authority (FCA), the British equivalent of the SEC, has just published its final consultation before a comprehensive regulatory framework comes into force. This initiative puts the country in direct competition with the European Union and its MiCA regulation.
For crypto investors, this British development is significant. It will determine whether London remains an attractive hub for crypto companies after Brexit, and how cross-border services will be impacted.
📅 The UK Crypto Regulation Timeline
The FCA has defined a precise timeline for implementing its new regime:
- February 12, 2026: End of consultation period for technical documents (CP25/40, CP25/41, CP25/42)
- March 12, 2026: Deadline for the Consumer Duty consultation applied to cryptocurrencies
- September 2026: Opening of the authorization gateway for license applications
- October 25, 2027: Deadline to obtain FCA authorization and continue operating in the UK
This timeline is more extended than MiCA in Europe, where companies must be compliant by July 2026. This gives British companies additional time but also creates a prolonged period of uncertainty.
🛡️ Consumer Duty: Enhanced Investor Protection
The Consumer Duty is the cornerstone of the new British framework. This rule, already applied to traditional financial services, will be extended to crypto companies. It imposes three fundamental obligations:
Acting in Good Faith
Platforms will need to demonstrate that they treat their customers with integrity. This includes complete transparency about fees, risks, and service conditions.
Avoiding Foreseeable Harm
Companies will no longer be able to hide behind “terms and conditions” to escape responsibility. If harm is foreseeable, they must prevent it.
Helping Customers Achieve Their Financial Goals
This is the most ambitious requirement. Platforms will need to support their users, especially beginners, throughout their investment journey. This could include educational tools or personalized warnings.
However, the FCA has clarified that “regulation cannot and should not try to eliminate all risks.” The goal is to inform investors, not prevent them from investing. For more on crypto risks, see our dedicated guide.
⚙️ Staking and DeFi: The New Rules
The CP25/40 consultation document details the rules applicable to the most innovative crypto activities:
Staking: Regulated but Permitted
Staking, which allows you to generate income by locking up cryptocurrencies, will be a regulated activity requiring FCA authorization. Companies will need to:
- Obtain explicit consent before each staking operation
- Provide clear information about risks of loss
- Maintain detailed records of rewards, fees, and operational losses
- Have a minimum capital of £150,000
DeFi in a Gray Area
The FCA is taking a pragmatic approach to decentralized finance. It is not creating a specific regime for “truly decentralized” protocols. These will remain outside the regulatory scope.
However, if an “identifiable controlling entity” operates a DeFi protocol, standard rules will apply. The FCA plans to publish additional guidance on this concept of “true decentralization.”
💰 Capital Requirements for Crypto Firms
The CP25/42 document establishes minimum prudential requirements (“Permanent Minimum Requirements” or PMR) based on activity type:
| Activity | Minimum Capital |
|---|---|
| Arrangement or brokerage (dealing as agent) | £75,000 |
| Exchange platform or staking | £150,000 |
| Proprietary trading (dealing as principal) | £750,000 |
These amounts are significant for small companies. A startup offering staking and trading would need at least £750,000 in equity. This could accelerate sector consolidation.
🇬🇧 vs 🇪🇺 UK Versus Europe: Two Regulatory Approaches
Brexit has created regulatory divergence between the UK and the European Union. Here are the main differences:
| Criterion | UK (FCA) | Europe (MiCA) |
|---|---|---|
| Compliance deadline | October 2027 | July 2026 |
| Staking | Regulated with explicit consent | Regulated |
| Decentralized DeFi | Out of scope | Ambiguous position |
| Consumer protection | Strict Consumer Duty | Disclosure obligations |
| European passport | No | Yes (27 countries) |
The UK’s advantage lies in a more flexible approach to DeFi. But the lack of a “passport” means British companies cannot automatically serve European clients, and vice versa.
For European investors, this means British platforms will need to obtain a separate MiCA license to continue operating in the EU. Our DAC8 guide explains the tax implications of this fragmentation.
📊 What This Means for Investors
British regulation will have concrete consequences for all crypto investors:
For Clients of UK Platforms
- Better protection through Consumer Duty
- Access to the Financial Ombudsman Service in case of disputes
- Guarantees on asset custody
- Risk of some smaller platforms closing
For European Investors
- Verify if your platform is MiCA-registered in Europe
- Anticipate possible restrictions on cross-border services
- Prefer platforms registered with regulators
🔮 Outlook: Can London Compete with Europe?
The British strategy is clear: create a more flexible environment than MiCA to attract innovative crypto companies. Several factors favor London:
- Additional time: 15 extra months compared to Europe for compliance
- DeFi preserved: Truly decentralized protocols escape regulation
- Financial ecosystem: London remains Europe’s leading financial center
- English language: Facilitates access to international talent and capital
However, the lack of a European passport remains a major handicap. Companies wishing to serve both markets will need to maintain two separate licenses, increasing their compliance costs.
The next step will be the FCA’s publication of final rules, expected later in 2026. Until then, companies must prepare and investors should stay alert to developments.
📚 Glossary
- Staking: A method of locking up cryptocurrencies to secure a blockchain network and receive rewards in return. Learn more
- DeFi (Decentralized Finance): A set of financial services (lending, exchanges, savings) operating on blockchain without centralized intermediaries. Learn more
- Consumer Duty: A UK FCA rule requiring financial companies to act in their clients’ best interests and avoid foreseeable harm
- MiCA: European “Markets in Crypto-Assets” regulation establishing a harmonized framework for cryptocurrencies across the 27 EU countries
- FCA: Financial Conduct Authority, the UK financial regulator equivalent to the SEC in the US
- Custody: Secure storage and safekeeping service for cryptocurrencies on behalf of clients. Learn more
❓ Frequently Asked Questions
What is the FCA’s Consumer Duty?
The Consumer Duty is a British rule requiring financial companies to act in good faith, avoid foreseeable harm, and help customers achieve their objectives. It will apply to crypto platforms from October 2027.
Does FCA regulation apply to European investors?
Not directly. European investors are subject to the European MiCA regulation. However, if they use a British platform, that platform must also be MiCA-registered in Europe to continue legally serving them.
Will staking be banned in the UK?
No, staking remains permitted but will be regulated. Platforms will need to obtain an FCA license, have minimum capital of £150,000, and get explicit user consent before each operation.
How is DeFi treated by the FCA?
The FCA distinguishes between “truly decentralized” protocols (outside regulation) and those with an “identifiable controlling entity” (regulated). This approach is more flexible than MiCA in Europe.
What is the difference between UK regulation and MiCA?
MiCA offers a passport for 27 countries with a July 2026 deadline. The UK FCA has a more flexible approach to DeFi but no European passport, with an October 2027 deadline. Learn more about MiCA and DAC8
How do I choose a secure crypto platform?
Prefer platforms registered with regulators (MiCA in Europe, FCA in the UK). Check guarantees on asset custody and user reviews. Learn more about choosing a platform
📚 Sources
This article is based on the following sources:
- CoinDesk – Crypto firms in the UK face ‘higher bar’ under FCA’s final Consumer Duty proposal
- FCA Official – A new regime for cryptoasset regulation
- Sidley Austin LLP – UK Cryptoasset Regulation — Action Points for 2026–27
- Skadden – UK Legal Framework for Crypto Takes Shape
- Linklaters – FCA drafts more UK crypto regulation
- FCA CP25/42 – A prudential regime for cryptoasset firms
How to cite this article:
Fibo Crypto. (2026). UK FCA: Final Phase of Crypto Regulation Consultation. Retrieved [date] from https://fibo-crypto.fr/en/blog/uk-fca-crypto-regulation-consumer-duty-2026
