The UK Government is planning fresh legislation designed to overhaul the regulation of cryptocurrencies and force crypto firms to meet strict requirements set out by the FCA.

The new rules, set to be enforced in the second half of 2027, would see the financial regulator enforce a new approach inspired by the regulations around mainstream financial products, giving the FCA substantially more control over the UK’s burgeoning crypto market.

By widening the watchdog’s remit over companies offering crypto services, the Treasury hopes to bring greater clarity to the sector and reassure consumers, while providing mechanisms to identify suspicious behaviour and ensure corporate responsibility.

Crypto has so far largely escaped the rules that govern traditional markets like stocks and shares in the UK, leaving many investors without conventional safeguards against major scams. 

Last month, the Serious Fraud Office announced it was opening an investigation into a $28 million (£21m) crypto scheme called Basis Markets involving suspected fraud, with data showing that investment scams paid out almost $1 billion (£747m) in crypto to fraudsters in the first half of 2025.

“Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world-leading financial centre in the digital age,” said the Chancellor, Rachel Reeves.

“By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.”

At the moment, crypto firms like exchanges and wallet providers must register with the FCA when their activities fall under anti‑money laundering rules, with the government claiming that an extension of the FCA’s mandate is necessary to support legitimate businesses operating in this space.

However, the Treasury also hopes the changes will boost the UK’s standing in the global crypto market and ensure that regulation keeps pace with competitors like the EU, which saw the introduction of extensive new rules for crypto-asset service providers with its landmark Markets in Crypto-Assets (MiCA) law, set to be fully enforced at the end of the year.

Under Labour, the UK is pursuing a more complex mix of cutting-edge regulation coupled with an easing of more burdensome red tape that could stifle economic growth.

Recommended reading

• AI in Finance is “Going Nowhere Fast”, Say UK Bank Leaders
• 28 Million Brits Using AI for Personal Finance, Finds Lloyds Bank
• Five Scottish Fintechs Win £50K in FRIL Innovation Call

For the FCA, the government’s growth mission has translated into a focus on innovation, with the regulator recently setting out plans for the tokenisation of investment funds, for the use of AI in financial services, for fast-tracking new fintech firms, and for the “mainstreaming” of stablecoins.

In a recent letter to the prime minister, the FCA’s chief executive, Nikhil Rathi, was clear in his vision, saying that the regulator would “further adapt [its] supervisory approach” to “focus on outcomes, not prescriptive rules”. 

How that mission will work in tandem with ensuring UK investors and consumers are protected amid the turbulent crypto industry is a question to be answered when the government introduces this latest tranche of legislation next year.

“We want the UK to be at the top of the list for crypto assets firms looking to grow and these new rules will give firms the clarity and consistency they need to plan for the long term,” said Lucy Rigby, the minister for the City of London.