British cryptocurrency company gets five-month window to seek FCA approval

British cryptocurrency companies receive five-month window to apply for Financial Conduct Authority clearance

British cryptocurrency companies have received a five-month application window from September 30, 2026 to February 28, 2027. During this period, companies will need to seek approval from the Financial Conduct Authority (FCA) to qualify for compliance before the new regulatory regime takes effect in October 2027.

Key Summary

• FCA will accept applications from September 30, 2026 to February 28, 2027.
• Cryptocurrency companies that already have anti-money laundering registration qualifications still need to obtain separate approval if they involve regulated encryption activities.
• Qualified companies that submit applications within the window period may continue to provide specific services during the FCA review period.
• Zumo CEO Nick Jones said clearer rules could encourage financial institutions to expand their cryptocurrency business in the UK.

Regulatory timetable and transition arrangements

According to a letter published in the Financial Times from Nick Jones, founder and CEO of Zumo, this opening of the application window provides a path for some financial institutions that previously considered it "too difficult" to enter the UK market. Jones pointed out that while many institutions understand digital assets and want to provide related products, regulatory uncertainty and risks from business partners have hindered their progress.

The timetable announced by the FCA clarifies the specific date for the next step: applications will be open on September 30, 2026 and will expire on February 28, 2027. The new regulatory system is expected to be officially launched on October 25, 2027. To help companies prepare, regulators launched pre-application support services in July this year.

Licensing requirements under the new regulations

Under the upcoming regulations, companies engaging in regulated crypto activities must obtain FCA authorization or change their existing licenses. The FCA said that current crypto regulation is mainly focused on anti-money laundering registration and financial promotion; while the 2027 framework will include more activities in its financial services rulebook.

According to the FCA's final policy statement, existing anti-money laundering registrations will not automatically translate into licenses under the new system. Companies that have registered under anti-money laundering regulations, as well as other financial services authorized companies, must apply if their encryption activities fall within the scope of the new regulations. Previous reports have shown that this requirement covers trading platforms, custodians, stablecoin issuers and companies that provide specific pledge services.

Submission of applications within the five-month window period also affects whether existing companies can continue to operate during the application evaluation period. The FCA stated that companies that apply on time and meet the requirements can continue to carry out specific activities under transitional provisions. Companies that apply after February 28, 2027 cannot rely on these transitional provisions and may have to stop relevant activities before obtaining approval. It should be noted that the submission of applications itself does not grant permission, and regulatory agencies do not ensure that decisions will be made on all timely submissions before the new system begins.

The new regulations set requirements for a company's financial status, governance structure and code of conduct, supplemented by activity-specific standards. The FCA's policy statement issued in June covered disclosure requirements for stablecoin issuance, custody of cryptoassets, access to asset issuance or transactions, as well as controls to prevent market abuse. As a result, applicants can evaluate specific rules based on the services they plan to provide, rather than treating obtaining a single license as a universal passport for all encryption products.

Traditional financial institutions expand access rights through encrypted ETN

Jones cited Hargreaves Lansdown as an example to illustrate that traditional investment platforms are entering this market. The company began offering nine Bitcoin and Ethereum exchange-traded notes (ETNs) to eligible customers on September 3. These notes give investors access to asset prices, and customers do not directly purchase cryptocurrencies and do not control the associated private keys.

Access is limited to customers who use the platform's "Advanced Investment" service. Depending on product details, customers must self-certify as senior investors, pass tests on product risks, and complete a 24-hour cooling-off period. The launch of the platform follows the FCA's decision to allow UK retail investors to purchase qualified crypto ETNs starting in October 2025.

Hargreaves Lansdown's ETN products and the upcoming authorization process involve different parts of the market. ETN is a listed investment product that is already tradable under the FCA rules, and the new application window is for companies to seek permission to engage in activities covered by the 2027 crypto regulatory regime. Jones linked these in his letter as evidence that mature financial companies are becoming more willing to develop crypto services in the UK.

The FCA is also considering another way for investment funds to gain crypto exposure. In June this year, the FCA proposed setting a 10% limit on the crypto ETN positions of certain authorized funds, while saying that it was not considering allowing these funds to directly hold crypto assets at the time. The proposal is separate from rules that allow qualified retail customers to purchase ETN through investment platforms.

Offshore exchanges face FCA application decisions

For overseas companies serving UK customers, the authorization window provides an independent decision on whether to seek cover service licenses. There have been previous reports that Binance plans to apply for an FCA license, but Binance has not publicly confirmed submitting the application, and the FCA's existing restrictions on Binance Markets Limited are still in effect.

Jones believes in his letter that as companies prepare for UK rules, more companies will need compliant local partners and operating systems. He described offshore services and loosely organized business processes as models the industry expects to abandon. This was Jones 'expectation, not the FCA's discovery that offshore firms had changed their operating model.

The United States is addressing different regulatory issues. On August 18, the U.S. Securities and Exchange Commission (SEC) proposed draft rules on certain investment contracts involving crypto assets, including proposed securities registration exemptions. The proposal is still in the public comment stage and does not change the FCA's requirements for companies carrying out regulated activities in the UK.