UK Makes Historic Move: Crypto Finally Enters Full Regulatory Perimeter

The Wild West era for crypto in Britain is officially ending.

The UK government has unveiled sweeping plans to bring all cryptocurrency activities—from trading to custody—under the full oversight of its financial regulators. This isn't a tentative step; it's a decisive move to integrate digital assets into the heart of the nation's financial system.

From Fringe to Framework

For years, crypto operated in a regulatory gray area—innovative but untethered. Now, the Financial Conduct Authority (FCA) is set to gain comprehensive authority. Expect stringent rules on market abuse, transparency, and consumer protection that mirror those for traditional finance. The message is clear: play by our rules, or don't play at all.

Stability Over Speculation

The core driver? Mitigating the systemic risks that kept regulators awake at night. By establishing clear guardrails, the UK aims to prevent the kind of meltdowns that wiped out billions in investor wealth—turning volatile crypto markets into something resembling a legitimate asset class, albeit one that still gives traditional bankers heartburn.

The Global Domino Effect

London isn't acting in a vacuum. This move pressures other financial hubs to clarify their own stances. Will the EU's MiCA framework now face tougher competition? Can the US afford to lag behind with its patchwork of state-level regulations? The UK just raised the stakes in the global race for crypto supremacy.

The ultimate goal is to foster 'responsible innovation'—a phrase that likely causes eye-rolls among crypto purists but soothes institutional investors sitting on piles of cash. After all, nothing attracts big money like the comforting embrace of red tape and compliance forms. The final, cynical finance jab? They're not banning the casino; they're just installing surveillance cameras and charging a higher entry fee.

Domestic crypto reporting from 2026

Starting January 1, 2026, UK-based crypto service providers will be required to collect and report transaction data for all UK-resident customers. This extends the OECD’s Crypto-Asset Reporting Framework (CARF) into domestic enforcement.

The measure is designed to combat tax evasion and improve visibility into crypto-related income and gains. HM Revenue & Customs (HMRC) aims to close tax gaps by aligning domestic crypto reporting with global standards and strengthening compliance oversight.

Treasury tightens oversight

Alongside tax reporting, the Treasury is now drafting broader rules that will bring crypto firms into the UK’s “regulatory perimeter.” This WOULD align crypto with traditional finance, adding clearer rules, stronger protections, and tighter AML checks.

Officials argue the framework will boost confidence without stifling innovation. Both the Bank of England (BoE) and the FCA have promised to finalize their rules by the end of 2026. 

Daniel Slutzkin, head of UK at crypto exchange Gemini, said firms had “long awaited regulatory clarity” and could now start preparing to meet the new requirements.

UK property law reform

The regulatory push is reinforced by a recent legal shift. In December, the UK formally recognized crypto as property, giving users clear rights to own, transfer, inherit, and recover digital assets after years of legal gray areas.

Taken together, the moves signal a hard turn in how the UK treats crypto. Investors get more protection and clarity, but the message is blunt: play by the rules, or don’t play at all.

Also read: FCA Adds Eunice to Sandbox to Test UK Crypto Disclosures