UK FCA Opens DeFi and Crypto Consultations Ahead of 2027 Rules

The UK’s Financial Conduct Authority (FCA) opened two consultations on October 21 to clarify compliance duties for decentralized finance (DeFi) and crypto businesses. The proposals address financial crime risks and determine which crypto activities may require authorization under the country’s upcoming regulatory framework.

Consultations GC26/7 and CP26/36 are open for industry feedback until November 18, 2026. The new UK crypto regime is scheduled to take effect on October 25, 2027.

FCA Clarifies DeFi Compliance Expectations

The FCA’s guidance explains how firms using DeFi should handle operational problems, financial crime and money laundering. While automated protocols can reduce the need for intermediaries, businesses remain responsible for managing risks tied to their services.

Related: OCC Finalizes GENIUS Act Rules for Stablecoin Issuers Ahead of 2027

The regulator also points to vulnerabilities in open protocols and automated systems, urging firms to put appropriate safeguards in place.

Crypto Firms Face Authorization Deadline

The second consultation proposes exemptions for certain stablecoin payment arrangements, technical services and proprietary trading. These exemptions would help firms determine whether their activities require FCA authorization.

The regulator began accepting crypto authorization applications on September 30. Firms seeking to continue operating under the new rules must apply by February 28, 2027.

Separately, British authorities recovered £5.6 million from Hok Seng Ling in a cryptocurrency money-laundering case linked to Zhimin Qian’s investment scheme. Victims are also pursuing claims over approximately 61,000 Bitcoin seized by authorities, reportedly worth £3.8 billion.

Related: 82 Crypto Protocols Shut Down in 2026: Is the Industry Facing a Crisis?