FCA consults on cryptoasset exclusions before 25 October 2027 regime

The Financial Conduct Authority (FCA) is consulting through CP26/36 on how further legislative exclusions will affect the UK’s cryptoasset regulatory perimeter. The guidance is intended to help firms determine whether they need permission before the new regime takes effect on 25 October 2027.

The practical task is to map each service against the amended perimeter, including any exclusion, and decide whether the business needs new authorisation or a variation of existing permission. Existing registrations and permissions will not convert automatically. Firms with existing UK cryptoasset business that want to conduct new regulated activities must apply between 30 September 2026 and 28 February 2027 if they want to use the savings provision.

The exclusions under consultation

The FCA says the draft Cryptoassets (Miscellaneous Amendments) Regulations 2026 would introduce new exclusions from some regulated cryptoasset activities. They include:

- temporary settlement arrangements;
- temporary UK qualifying stablecoin holding arrangements for payment transactions;
- arrangements involving backing assets held in relation to a UK qualifying stablecoin;
- proprietary trading where the person is not providing a service to another person;
- proprietary trading where the person acts as a market maker on a QCATP; and
- technical services that merely provide access to services offered by a third party or to a decentralised protocol.

The proposals follow the FCA’s final perimeter guidance in PS26/18, published on 16 September. That guidance explained that the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 would bring activities such as cryptoasset safeguarding, trading-platform operation, arranging deals and staking into the FCA’s perimeter from 25 October 2027.

CP26/36 is the further guidance promised after the government laid a second statutory instrument containing additional exclusions, including provisions for certain decentralised technical services and safeguarding arrangements. The FCA proposes to update its Perimeter Guidance Manual so that it reflects the amended legislative position.

The exclusions are not a general exemption for firms operating in the cryptoasset sector. A business must still assess whether its actual service meets the relevant conditions.

The consultation is aimed at firms carrying out, or planning to carry out, regulated cryptoasset activities in the UK, as well as already authorised firms that may need additional permissions. It also identifies central securities depositaries, including third-country CSDs, with cryptoasset safeguarding arrangements as relevant firms.

Forbearance for affected applications

The FCA acknowledges that the timing of the latest statutory instrument has created uncertainty for a small number of firms about whether they need authorisation. The specific concern is the exclusion for technical services providers.

Where a firm can demonstrate that this uncertainty materially affected its ability to submit a complete application during the application period, the FCA says it will exercise some forbearance. The firm must still submit an otherwise complete application within the period ending on 28 February 2027. In those circumstances, the FCA will allow additional time to resolve incomplete elements relating to the arranging permission.

Firms affected by the uncertainty that have not already done so should contact the FCA through its pre-application support service.

The FCA’s recent crypto activity shows why the perimeter distinction has immediate practical significance. On 17 September, it and partner agencies targeted three London premises suspected of illegal peer-to-peer crypto trading and issued cease-and-desist letters, according to the FCA’s official announcement. The question of whether a firm merely provides technical access, or is providing a regulated service, can therefore affect both its authorisation analysis and the regulator’s response.

In Atlas’s view, CP26/36 is intended to reduce permissions uncertainty during the transitional application window, rather than change the 25 October 2027 commencement date. The FCA aims to publish final perimeter guidance in January 2027, after considering consultation responses.

Responses to CP26/36 close on 18 November 2026.