UK crypto-asset regulation — FSMA 2023, financial promotion regime, and the Travel Rule
Plain-English guide to the UK's evolving regulatory framework for crypto-assets: how the Financial Services and Markets Act 2023 expanded the FCA's perimeter to crypto, the financial promotion regime in force since October 2023, money-laundering registration, the Travel Rule, and HM Treasury's roadmap for the wider regulatory regime expected by 2026-2027.
Wprowadzenie
Crypto-assets — Bitcoin, stablecoins, NFTs, governance tokens, and the more exotic structures — sit at the edge of UK financial regulation. Until the Financial Services and Markets Act 2023 (FSMA 2023), most crypto activity was outside the FCA's regulatory perimeter, captured only by anti-money-laundering registration under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) and by criminal offences under the Proceeds of Crime Act 2002. FSMA 2023 grants HM Treasury wide power to bring crypto-asset activities into the FCA's regulated activities regime, and the financial promotion regime was extended to crypto-asset promotions from 8 October 2023 — meaning that any communication of an invitation or inducement to engage in crypto-asset activity in the UK must be made or approved by an FCA-authorised person (or fall within a narrow exemption). The Travel Rule has applied to crypto-asset transfers from 1 September 2023. HM Treasury's October 2023 'Future Financial Services Regulatory Regime for Cryptoassets' response sets the roadmap: phased introduction of issuance, custody, exchange, and stablecoin regulation through 2026-2027. Stablecoins used in systemic payment systems are likely to be regulated by the Bank of England under FSMA 2023 Pt 5. Tax treatment remains essentially the same as for other intangible property — HMRC's Cryptoassets Manual applies CGT, income tax, and corporation tax according to the activity.
In Brief
Crypto-assets are not yet specified FCA-regulated activities in the UK, but the financial promotion regime applies from October 2023 and AML registration is mandatory for exchanges and wallet providers. FSMA 2023 grants HM Treasury power to extend full regulation; the phased framework for issuance, custody, and exchange is expected to be in force by 2026-2027. Stablecoins used in systemic payments are being brought under Bank of England oversight.
Podstawowe zasady
Perimeter (FSMA 2000 s.19 + s.22) — carrying on a 'regulated activity' in the UK requires FCA (or PRA) authorisation. Crypto-asset activities are NOT yet specified regulated activities; FSMA 2023 grants HM Treasury power to specify them by statutory instrument.
Financial promotion (FSMA 2000 s.21) — communicating an invitation or inducement to engage in crypto-asset activity is restricted; must be made or approved by an authorised person OR fall within exemptions (e.g. high-net-worth, certified sophisticated investor) OR be communicated by a person registered for AML purposes (transitional).
MLR registration (MLRs 2017 reg.14A) — operating a crypto-asset exchange or custodian wallet provider in the UK requires registration with the FCA for AML purposes. The FCA assesses fitness and propriety.
Travel Rule (MLRs 2017 reg.64A et seq, since 1 Sep 2023) — crypto-asset transfer providers must collect and transmit originator and beneficiary information for transfers of crypto-assets, mirroring wire transfer requirements.
Market abuse — the Market Abuse Regulation does not apply to crypto-assets in itself, but FSMA 2023 grants powers to extend a tailored market-abuse regime to crypto.
Stablecoins — fiat-backed stablecoins used as payment can be brought into the FSMA payment-systems regime, with the Bank of England as lead regulator for systemic stablecoins (Banking Act 2009 amended by FSMA 2023).
Civil and criminal recoveries — POCA 2002 confiscation orders can target crypto-assets; the Economic Crime (Transparency and Enforcement) Act 2022 and Economic Crime and Corporate Transparency Act 2023 expanded powers to seize and detain crypto.
Consumer redress — the Financial Ombudsman Service jurisdiction is limited to regulated firms; most pure-crypto disputes fall outside. Consumers are warned the FSCS does not cover crypto-asset losses.
Kluczowe ustawy
Financial Services and Markets Act 2023
Financial Services and Markets Act 2000 (as amended)
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
Economic Crime and Corporate Transparency Act 2023
Proceeds of Crime Act 2002
Wiodące orzeczenia
AA v Persons Unknown (re Bitcoin)
[2019] EWHC 3556 (Comm)
Tulip Trading Ltd v Bitcoin Association for BSV
[2023] EWCA Civ 83
Osbourne v Persons Unknown (re NFT)
[2022] EWHC 1021 (Comm)
Frequently Asked Questions
Do I need FCA authorisation to operate a crypto exchange in the UK?
Not yet for the exchange activity itself (it is not a specified regulated activity under FSMA 2000), BUT you must register with the FCA under the Money Laundering Regulations 2017 (reg.14A) if you carry on crypto-asset exchange or custodian wallet activity in the UK. The FCA has been strict about fitness and propriety; many applications have been refused or withdrawn. Once HM Treasury implements the broader regime under FSMA 2023, full authorisation will be required.
What is the Travel Rule and when does it apply to me?
The Travel Rule (MLR 2017 reg.64A onwards, since 1 September 2023) requires crypto-asset transfer providers to collect and transmit information about the originator and beneficiary for crypto-asset transfers. It mirrors the wire-transfer information requirements (FATF Recommendation 16). The threshold is £1,000 for transfers between providers; below that, simplified data applies. Internal transfers (between accounts of the same customer at the same provider) are exempt.
Can I promote crypto-assets to UK consumers?
Only if the promotion is communicated or approved by an FCA-authorised person, OR you yourself are MLR-registered AND comply with the FCA's financial-promotion rules (PERG 8 and COBS 4A), OR the promotion falls within an exemption (e.g. high-net-worth or certified sophisticated investor under the Financial Promotion Order 2005). Misleading crypto promotions are a criminal offence under FSMA 2000 s.21 — penalty up to 2 years' imprisonment and unlimited fine.
How is crypto taxed in the UK?
HMRC treats crypto-assets as property, not currency. Disposals (selling, swapping, paying with crypto) are subject to capital gains tax (CGT); gains over the annual exempt amount are taxable at 10% / 20% (basic / higher rate) for non-residential assets in 2026-27. Income-tax may apply to mining, staking, airdrops, and crypto received as employment income. Companies pay corporation tax. Full guidance is in HMRC's Cryptoassets Manual.
Can crypto be seized by the police or recovered in civil litigation?
Yes. Crypto-assets are property capable of being subject to a proprietary injunction (AA v Persons Unknown [2019] EWHC 3556) and to confiscation under POCA 2002. The Economic Crime and Corporate Transparency Act 2023 expanded police powers to seize and freeze crypto without prior conviction (POCA Part 4B). Civil recovery through worldwide freezing orders is well-established.
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