Walking the UK Perimeter: the FCA consults on cryptoasset guidance
The Financial Conduct Authority has opened a consultation on draft guidance explaining which cryptoasset activities it considers sit inside the UK's regulatory perimeter under the new regime, which starts on 25 October 2027. CP26/36 proposes updates to the FCA's Perimeter Guidance Manual to reflect two pieces of legislation: the Financial Services and Markets Act 2000, as amended by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, and a second statutory instrument, the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026.
The consultation follows PS26/18, published in September 2026, which set out the final rules for the new regime itself. Firms working out whether their UK cryptoasset business will need FCA permission before the regime starts have until 18 November 2026 to respond, with final guidance targeted to arrive in January 2027.
What falls outside the perimeter?
The draft guidance focuses on exclusions from regulated cryptoasset activities, suggesting that the following do not, of themselves, require FCA permission:
temporary settlement arrangements;
temporary holding of a UK qualifying stablecoin for the purpose of a payment transaction;
certain arrangements involving the assets backing a UK qualifying stablecoin;
proprietary trading, provided the firm is neither dealing on behalf of another person nor acting as a market maker on a qualifying cryptoasset trading platform; and
technical services that merely provide access to a third party's services, or to a decentralised protocol.
That last exclusion comes from the second statutory instrument, which the Government laid around the time the authorisation window opened. The FCA said:
We acknowledge that the timing of the publication of this latest Statutory Instrument will have created uncertainty.
A parallel consultation on DeFi
The FCA has also published GC26/7, a guidance consultation on decentralised finance. It is aimed at firms that already know they are in scope and that interact with, or give access to, DeFi protocols. GC26/7 explains how existing obligations, including AML/CTF requirements, operational resilience, financial crime systems and controls, and the Money Laundering Regulations, apply when a firm's business model runs through decentralised infrastructure rather than a conventional intermediary. The FCA's framing is blunt:
regulated firms remain subject to the same outcomes expected in traditional finance.
A narrow door for existing firms
Existing UK cryptoasset firms seeking to carry on newly regulated activities can apply for authorisation under a savings provision, but only within a window that opened on 30 September 2026 and closes on 28 February 2027. The FCA has flagged some leeway for firms whose applications were affected by the uncertainty over the technical services exclusion: those firms may get extra time to finalise the arranging-permission parts of their applications, provided they submit an otherwise complete application inside the window.
What now?
Firms operating, or planning to operate, a UK cryptoasset business should:
map their current and planned activities against the exclusions in CP26/36, rather than assuming an existing exemption or a DeFi-adjacent structure keeps them outside the perimeter;
respond to the consultation by 18 November 2026 if the drafting leaves genuine ambiguity about their own business model, particularly around the technical services provider exclusion;
if already carrying on UK cryptoasset business and planning to add newly regulated activities, prepare an authorisation application for submission inside the 30 September 2026 to 28 February 2027 window;
read GC26/7 alongside CP26/36 where any part of the business touches DeFi protocols, since perimeter guidance alone will not answer what an in-scope firm must then do; and
track the FCA's timetable toward the regime's commencement on 25 October 2027, since final guidance is only targeted for January 2027, leaving firms about one month between final guidance and the close of the savings window, and about nine months before commencement.
International comparisons The UK's approach, drawing granular exclusions around specific activities such as stablecoin settlement and technical infrastructure, sits in contrast to the EU's MiCA regime, which defines its perimeter more by reference to the type of cryptoasset and the service provided, with less room for activity-specific carve-outs.
It is also a more incremental approach than the Cayman Islands' VASP framework under the Virtual Asset (Service Providers) Act, which captures virtual asset services broadly and principally under either trading or custody.
Whether the FCA's exclusion-by-exclusion method gives firms the clarity it promises, or simply relocates the line-drawing problem from legislation to guidance, is likely to become clearer once the consultation responses are in.
