UK Watchdog Accelerates Crypto Approvals Following Industry Backlash

Britain's financial regulator just hit the gas on crypto licensing—and the industry's finally breathing easier.

The Speed Shift

After months of complaints about bureaucratic delays, the FSA's new fast-track approach slashes waiting times from quarters to weeks. No more endless paperwork purgatory—just streamlined reviews that actually match crypto's breakneck pace.

Why The Sudden Urgency?

Market pressure forced their hand. Legitimate firms were bleeding opportunities while regulatory inertia fueled offshore migration. Now approvals roll out faster than Treasury ministers can say 'blockchain disruption.'

The Compliance Trade-Off

Faster doesn't mean softer. The watchdog still demands robust anti-money laundering protocols and investor protections—they're just cutting the red tape, not the standards.

London's Competitive Edge

This pivot positions the UK as a suddenly serious contender against EU hubs—proving even regulators eventually adapt when innovation outpaces their rulebooks. Because nothing motivates bureaucrats like realizing they're becoming irrelevant.

Of course, the same institutions that once called crypto a 'speculative bubble' now scramble to embrace it—typical finance, always late to the party but first to take credit.

Fewer Firms Apply As FCA Rules Bite

Despite the improvement, fewer crypto firms are seeking entry into the UK market. Applications fell from 46 in the year to April 2023 to 26 in the year to April 2025.

Approvals also dropped from eight in 2022-23 to just three in 2024-25, though the pace has picked up again in recent months.

Since 2020, all firms looking to conduct crypto asset activities in Britain have been required to register with the FCA. They must demonstrate compliance with the regulator’s rules on preventing financial crime, including money laundering and terrorist financing.

Quicker Authorizations Highlight UK Effort To Catch Up

According to figures released after a freedom of information request by law firm Reed Smith, crypto providers registering in the past year completed the process in just over five months on average. Two years earlier, it typically took 17 months, the FT said.

The quicker approvals come as the FCA prepares to launch a full regulatory framework for digital assets in 2026. Regulators in London are under pressure to create a more welcoming environment as the US and EU race ahead with more accommodative policies.

The FCA has added 55 companies to its register but remains cautious about the risks posed by the market. By contrast, US and EU regulators have been faster to approve products such as exchange-traded funds in Bitcoin and other digital assets, opening the door to retail investors.

FCA Weighs Sector-Specific Exemptions While Setting Baseline Rules

In an effort to ease the path for applicants, the FCA has recently begun offering preapproval meetings with case officers to help firms prepare their submissions. It has also hosted roundtables and webinars to clarify expectations around the registration process.

Last week, the regulator opened a consultation on applying the same regulatory standards to crypto firms as to traditional financial institutions. The plan seeks to establish baseline rules while weighing carve-outs that reflect the sector’s distinct features.

Some lawyers and executives say the looming launch of a broader regulatory framework may have contributed to the fall in applications. Companies may prefer to wait for the new rules before pursuing approval, betting that a clearer regime could make it easier to operate in Britain.