FCA Tightens Grip: UK Crypto Firms Face Major Reauthorisation Hurdles in New Licensing Roadmap

The UK's crypto landscape just got a regulatory shockwave. The Financial Conduct Authority (FCA) dropped its long-awaited—and feared—licensing roadmap, forcing hundreds of digital asset firms back to square one. No grandfathering, no grace periods—just a hard reset.

The Compliance Gauntlet

Existing 'temporary' registrations? Worthless. Every company must now navigate a full, permanent authorization process. The FCA's checklist reads like a compliance marathon: enhanced financial crime controls, rigorous capital requirements, and proof of 'fit and proper' management. One industry insider called it 'starting the race again after already running it.'

Survival of the Fittest

This isn't paperwork—it's a purge. The FCA's new framework deliberately raises the barrier to unsustainable heights for smaller players. Expect consolidation, exits, and a market dominated by well-funded, traditional finance entrants. The 'wild west' era? Officially condemned by bureaucratic decree.

Innovation's New Price Tag

The message is clear: operate in the UK, play by our rulebook. The roadmap promises 'clarity' but delivers complexity. Building a crypto business now requires a legal team rivaling the engineering one. It's the financial regulator's classic move—strangling innovation with red tape while claiming to protect it. The final gate swings shut. Adapt or evaporate.

The UK’s Financial Conduct Authority (FCA) has laid out a detailed roadmap for bringing cryptoasset firms under a new, fully regulated framework. The crypto licensing “gateway” is expected to open in September 2026, ahead of the full cryptoasset regime taking effect in October 2027. The MOVE marks a major shift in how crypto firms will be authorised, supervised, and allowed to operate in the UK market.

No Automatic Carryover for Existing Registrations

One of the most critical points for crypto firms is that existing registrations will not automatically transfer into the new regime. Firms currently registered under the UK’s anti-money laundering rules (MLRs), payment services, or electronic money regulations must reapply for authorisation under the Financial Services and Markets Act (FSMA).

This also applies to firms already authorised under FSMA for other financial activities. They will need to formally vary their existing permissions to cover cryptoasset services before the new regime begins.

Importantly, crypto firms that rely on third-party FCA-authorised firms to approve financial promotions will no longer be allowed to do so. To continue marketing to UK customers, they must secure direct FCA authorisation.

How the Application Gateway Will Work

The FCA expects the formal application period to open in September 2026. This window will last at least 28 days and close no later than 28 days before the new regime comes into force. Firms applying within this period are expected to have their applications decided before October 2027.

If an application is still under review when the regime begins, firms may continue operating under a “saving provision”, allowing services to continue temporarily. However, if an application is ultimately rejected, firms may be pushed into a structured exit process.

Transitional Regime for Late or Unapproved Firms

Firms that miss the application deadline or fail to secure approval in time will automatically enter a transitional regime. While in this phase, firms can only continue servicing existing contracts and are barred from launching new crypto products or services until authorised.

The FCA has made it clear that late applications will not receive expedited reviews, increasing operational risk for firms that delay preparation.

FCA Support, But No Guarantees

To help firms prepare, the FCA plans to host information sessions explaining expectations and application standards. It is also offering optional pre-application meetings through its Pre-Application Support Service. While helpful, the FCA stresses these sessions do not guarantee approval.

Overall, the new gateway signals the UK’s push toward a stricter, clearer crypto framework, one that raises compliance standards while giving firms a defined path to long-term legitimacy.