UK FCA opens DeFi consultations to clarify crypto rules ahead of 2027

The UK’s Financial Conduct Authority has opened two consultations to clarify how decentralized finance businesses will be regulated and which crypto activities could qualify for exemptions when the country’s new framework takes effect in October 2027. Summary The UK FCA has opened two consultations covering DeFi compliance requirements and exemptions from its upcoming crypto regulatory framework. The proposed guidance explains how existing operational resilience, financial crime and money laundering rules apply to firms using decentralized protocols. Certain stablecoin payment arrangements, proprietary trading activities and technical service providers could qualify for regulatory exemptions. Existing UK crypto businesses have until February 28, 2027, to apply for authorization ahead of the new framework taking effect in October. According to the FCA’s consultation documents, the proposals address how existing financial regulations apply to firms using DeFi protocols and which services will require authorization under the incoming cryptoasset regime. Both consultations opened on October 21 and will accept industry feedback until November 18, with the regulator expecting to publish ...