UK Regulators to Crypto Firms: Reapply or Shut Down
The FCA confirms current crypto licenses will be voided in 2026, forcing a mass re-application process that threatens to freeze non-compliant firms.
The Free Pass Is Over
The UK’s Financial Conduct Authority (FCA) has effectively served eviction notices to the country’s crypto sector, forcing every currently registered firm to reapply for authorization or face a market ban. In a roadmap released this week, the regulator confirmed that the existing anti-money laundering (MLR) registrations, held by major players like Gemini, Kraken, and others, will not carry over to the new regime.
Markets shrugged off the long-dated regulatory tighten, with Bitcoin holding steady at $90,300 (-0.7%) and Ether slipping slightly to $3,100 (-1.5%). Volume remained mute, suggesting traders are pricing this as an infrastructure headache rather than an immediate existential threat.
The Receipt: September 2026 Gateway
The FCA’s directive is absolute. Starting September 2026, a new “gateway” opens for firms to apply for full authorization under the Financial Services and Markets Act (FSMA). This is a massive escalation from the current light-touch MLR compliance. The timeline is rigid:
- Sept 2026: Application gateway opens.
- Oct 2027: New regime goes live.
- The Kicker: Any firm that misses the application window falls into a “transitional regime.”
“Existing registrations will not automatically convert, requiring all cryptocurrency firms to secure new approvals.”
The Cliff Edge
The details of the transitional regime are punitive. Firms trapped here can service existing contracts but are barred from launching new products. This effectively freezes growth for any company that fails to submit paperwork on time. Furthermore, the “Section 21” loophole is closed; companies can no longer rely on third-party approvers for financial promotions. They must secure direct authorization to market to UK citizens.
This move signals the end of the UK’s “Wild West” phase. By demanding full FSMA authorization, the FCA is forcing crypto natives to adopt the same capital, governance, and conduct standards as traditional investment banks. Expect a consolidation wave as smaller entities fold under the compliance costs before the 2026 deadline.
