The United Kingdom has emerged as a key player in the global cryptocurrency regulatory landscape. If you're launching or operating a crypto-related business and serve UK customers, understanding the FCA crypto registration—often referred to as the crypto license UK—is essential. This guide breaks down everything you need to know about the UK’s cryptoasset regulatory framework, including who needs to register, what activities are covered, and how to navigate the application process successfully.
Whether you're running a crypto exchange, offering custodial wallet services, or planning an Initial Coin Offering (ICO), compliance with Financial Conduct Authority (FCA) rules is no longer optional—it's mandatory.
What Is the FCA Crypto Registration?
Despite common usage, there is no formal “FCA crypto license.” Instead, businesses must undergo FCA crypto registration under the UK’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) regime. This registration is required for certain cryptoasset businesses that fall under the scope of the Money Laundering Regulations 2017 (MLRs 2017), as amended in 2019.
Without this registration, it's illegal to carry out regulated crypto activities from within the UK. While registration doesn’t grant full financial authorization like a banking or e-money license, it does place your business under FCA supervision—making it a critical step for legitimacy and operational continuity.
👉 Discover how to prepare a winning FCA crypto registration application today.
The UK’s Cryptoassets AML/CTF Regime
The UK implemented its crypto-specific AML/CTF framework on January 10, 2020, aligning with the EU’s Fifth Anti-Money Laundering Directive (5MLD). However, the UK went further than minimum requirements, expanding oversight to include more types of crypto businesses.
Under this regime, certain crypto firms are classified as “relevant persons”—obliged entities required to implement robust systems for detecting and reporting suspicious activity to authorities such as the National Crime Agency (NCA) and HM Revenue & Customs (HMRC).
Failure to comply can lead to severe penalties, including fines, enforcement actions, or even criminal prosecution.
Key Differences Between UK Rules and 5MLD
While inspired by 5MLD, the UK’s approach includes several enhancements:
- Broader scope: Covers crypto-to-crypto exchanges, ICOs, and crypto ATMs—not just fiat-crypto gateways.
- Wider definition of "cryptoasset": Based on the Cryptoasset Taskforce report, encompassing digital representations of value using distributed ledger technology (DLT).
- Unique custodian wallet definition: Focuses on entities with direct control over clients’ private keys and assets.
These distinctions mean more businesses are captured under regulation compared to other jurisdictions.
Do You Need FCA Crypto Registration?
You must register with the FCA if your business carries out regulated crypto activities from within the UK, regardless of where your company is incorporated.
This applies if:
- Your registered or head office is in the UK, and day-to-day management of crypto operations occurs there.
- You operate a crypto ATM in the UK—even a single machine triggers registration requirements.
Even non-UK companies serving British users may need to register if they actively conduct business in the jurisdiction.
What If My Company Has an EU Crypto License?
Having a license from another EU country—such as Estonia—does not exempt you from UK requirements. There is currently no "passporting" right for crypto services across borders. If your business operates in or targets the UK market, FCA registration is necessary.
Already Regulated Under FSMA 2000?
Even if your firm is authorized under the Financial Services and Markets Act 2000 (e.g., as a bank, e-money institution, or payment service provider), you still need separate cryptoasset registration with the FCA if you engage in regulated crypto activities.
This ensures that all firms handling cryptoassets meet specific AML/CTF standards tailored to digital assets’ unique risks.
Which Activities Require FCA Crypto Registration?
Only two categories of businesses currently require registration:
- Cryptoasset Exchange Providers
- Custodian Wallet Providers
If your firm performs either—or both—you must apply.
What Qualifies as a Cryptoasset Exchange Provider?
You need registration if you professionally:
- Facilitate fiat-to-crypto, crypto-to-fiat, or crypto-to-crypto exchanges.
- Operate crypto ATMs enabling such conversions.
- Arrange or make arrangements for these transactions (even indirectly).
This includes platforms involved in:
- Initial Coin Offerings (ICOs)
- Initial Exchange Offerings (IEOs)
- Token sales involving exchange for fiat or other cryptos
👉 Learn how top platforms structure compliant exchange models under FCA rules.
Are Derivatives Exchanges Covered?
Yes—if users trade rights or interests in cryptoassets (even without owning them directly), the platform may still fall under FCA oversight. However, note that the FCA has banned retail sale of crypto derivatives like futures and options. Only institutional clients can access such products.
Do Airdrops or Accepting Crypto Payments Require a License?
Generally, no. If you issue tokens via airdrops or accept crypto as payment for goods/services, you’re not considered an exchange provider—unless those tokens are later traded on a secondary market.
Merchants and developers distributing utility tokens for internal use typically don’t require registration.
What About Decentralized Exchanges (DEXs)?
The situation is nuanced. Pure DEXs that act only as peer-to-peer forums—without custody, matching, or transaction authorization—may fall outside FCA scope. But if your platform facilitates order matching or profits from trades, registration is likely required.
HM Treasury has clarified that centralized P2P platforms completing transactions must register.
What Is a Custodian Wallet Provider?
A custodian wallet provider:
- Safeguards or administers clients’ cryptoassets
- Holds or controls private keys on behalf of users
- Enables storage, transfer, and management of digital assets
Crucially, only custodial services require registration. Open-source wallet developers or non-custodial providers (where users retain full control) are exempt.
Note: The requirement applies only when actual cryptoassets are held—not mere rights or interests in them.
Exemptions and Exclusions
Not all crypto-related activities require registration. The following are generally excluded:
- Software development and sale (e.g., exchange platforms)
- Ancillary services (e.g., consulting, marketing)
- Occasional or non-commercial activity (e.g., helping friends buy small amounts of BTC)
However, if your actions suggest you're offering services "by way of business"—through frequency, advertising, or profit motive—you may be caught by the rules.
How Does This Compare to EMI or PI Regulation?
Many e-money institutions (EMIs) and payment institutions (PIs) assume adding crypto will be simpler. It’s not.
While some MLR obligations differ, the core goal remains: preventing financial crime. Crypto firms must show they can manage risks related to anonymity, volatility, and cross-border transfers.
Additionally:
- All crypto businesses must disclose that their services are not covered by the Financial Ombudsman Service or Financial Services Compensation Scheme.
- The FCA can appoint skilled persons to audit compliance.
- Firms must report suspicious activities and may face shutdown orders if found non-compliant.
Are Compliance Requirements Uniform?
No. Requirements scale with business complexity.
For example:
- All firms must conduct Customer Due Diligence (CDD) for transactions ≥ €15,000
- Crypto ATM operators must apply CDD for every transaction, regardless of amount
Risk-based policies must reflect your operational model, customer base, and asset types listed.
How to Apply for FCA Crypto Registration
Applications are submitted through the FCA’s online system: Connect.
You’ll need to declare which activities you perform:
- Fiat/crypto exchanges
- Crypto-to-crypto trading
- Crypto ATM operation
- Custody services
- Peer-to-peer facilitation
- ICO participation
Required Documents & Application Tips
1. Management & Shareholder Information
The FCA evaluates the fit and proper status of directors, MLROs, and significant shareholders. Submit:
- Detailed CVs
- Proof of identity and address
- Corporate ownership structure
- Fit and Proper Test results
Ensure your team has relevant experience in compliance, finance, or blockchain technology.
2. Business Plan
Your plan must include:
- Clear description of services
- Financial forecasts
- Marketing strategy
- Compliance budget
- Public wallet addresses (hot/cold)
Avoid startup-style pitches focused on growth. The FCA cares about risk mitigation, sustainability, and consumer protection.
3. Risk Management Policies
Submit comprehensive policies covering:
- IT & cybersecurity risks
- Liquidity and market volatility
- Financial crime prevention
- Data protection
- Disaster recovery
Include blockchain-specific safeguards—especially if supporting multiple networks (BTC, ETH, etc.).
4. AML/CTF Policy
This is critical. Your policy must:
- Align with JMLSG, FATF guidelines, and FCA handbooks
- Detail transaction monitoring tools
- Cover sanctions screening and PEP identification
- Be tailored to your business model—not generic templates
Why Might the FCA Reject Your Application?
Common reasons include:
- Weak management team (especially unqualified MLRO)
- Inadequate risk controls
- Poorly documented policies
- Unrealistic financial projections
- Lack of commitment to compliance
As the FCA states: you must prove you take AML responsibilities seriously.
Processing Time & Appeals
If your application is complete, expect a decision within three months. However, most applicants face follow-up questions—extending timelines significantly.
If rejected, you can appeal to the Upper Tribunal, but legal advice is strongly recommended before proceeding.
How Much Does It Cost?
As per FCA fee schedules:
- £2,000: For firms with < £250k annual crypto income
- £10,000: For firms with > £250k income
Annual renewal fees also apply based on revenue.
Frequently Asked Questions (FAQ)
Q: Is the FCA crypto registration a full license?
A: No. It’s a registration under AML/CTF rules—not a financial services license. It allows operation but doesn’t authorize investment advice or securities trading.
Q: Can I operate without registering if I’m offshore?
A: If you target UK customers or have infrastructure (like ATMs) in the UK, registration is required—even if based overseas.
Q: Does listing tokens make me a regulated exchange?
A: If you facilitate trading between users or hold custody, yes. Passive listing without exchange functionality may not trigger registration.
Q: What happens after I get registered?
A: You must maintain compliance, file regular reports, undergo audits, and update the FCA on major changes. Non-compliance risks suspension or removal from the register.
Q: Are stablecoins treated differently?
A: Yes. If a stablecoin qualifies as e-money (pegged 1:1 to fiat), additional EMI regulations may apply beyond AML registration.
Q: Can I use third-party compliance tools?
A: Yes—but ultimate responsibility lies with your firm. The FCA expects internal oversight even when outsourcing monitoring or KYC processes.
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