The UK’s financial regulator has opened the application gateway for cryptoasset firms seeking authorisation under the country’s forthcoming full regulatory regime, setting a 28 February 2027 deadline for firms that intend to keep operating when the new framework is planned to begin on 25 October 2027.
The move marks an operational step in bringing specified cryptoasset activities within the Financial Services and Markets Act 2000 framework. Firms can now submit applications for authorisation, while businesses already authorised for other regulated activities must apply to vary their permissions if they want to carry out the new cryptoasset regulated activities.
Gateway opens before planned October 2027 regime
The application period began on 30 September 2026 and is due to close on 28 February 2027. The full regime is planned to commence on 25 October 2027, giving the regulator a period in which it expects to assess applications submitted on time before the rules take effect.
Authorisation is not automatic. Firms must demonstrate that they meet the standards required under the incoming framework, and firms that cannot show they meet those standards will not be authorised to provide regulated cryptoasset services in the UK market.
The regime is intended to cover consumer protection, safeguarding of customer assets, market integrity and financial resilience. Those areas will form part of the assessment of firms applying to operate under the new permissions.
The opening of the gateway does not mean crypto firms are already fully authorised under the new regime, nor does it remove the risks associated with cryptoassets. It starts the process through which firms can seek permission to continue regulated activity once the new framework is in force.
No automatic conversion for existing registrations
Firms already registered for anti-money-laundering supervision under the Money Laundering, Terrorist Financing and Transfer of Funds regulations will not be automatically converted into authorised firms under the new regime. They will need to secure authorisation under FSMA for the relevant cryptoasset activities.
The same principle affects firms that are registered or authorised under payment services or electronic money rules, where the new cryptoasset activities require separate permission. Existing FSMA-authorised firms must seek a variation of permission rather than assume that current authorisation covers the new activities.
Applications are to be submitted through the regulator’s online system. Firms may also request pre-application meetings to discuss their business model and the authorisation process, but such meetings are optional and do not guarantee a successful application.
Businesses seeking pre-application support must provide meaningful information about their proposed business model, products, services and customer types, including analysis of the regulated activities for which they intend to apply. Firms have also been told to consider independent legal or compliance advice when preparing an application.
What happens if applications are still pending
Firms that apply during the gateway period may continue to provide cryptoasset services while their application is being assessed if no decision has been reached by the time the full regime begins. That position is subject to statutory saving provisions and to the outcome of the application process.
The saving provision can also apply where a firm has referred a refusal decision to the Upper Tribunal and the tribunal has not made a final decision. In certain circumstances, the regulator may direct that a firm enters the more restricted transitional provision instead.
If a tribunal agrees with a refusal decision, the firm would enter the transitional provision in order to leave the UK market in an orderly manner. If the tribunal disagrees, it may overturn or vary the decision, or require the regulator to reconsider it.
Firms using the saving provision will be required to notify the regulator after the full commencement date and again when they stop relying on it. The exact notification process is expected to be set out separately.
Late applicants face tighter limits
Firms can apply outside the gateway period, but late applications will not be accelerated to compensate for the delay. A firm that applies after 28 February 2027 but is not authorised with the required permissions before the new regime starts will enter transitional arrangements when the regime goes live.
Those transitional arrangements are more restrictive. Firms in that position will be able to carry out the new UK regulated cryptoasset activities only to the extent necessary to perform pre-existing contracts entered into before they entered the transitional provision.
They will not be able to enter into new contracts with existing UK customers or make new contracts with new UK customers while in that transitional position. The distinction gives firms a strong practical incentive to apply within the gateway period if they intend to continue operating in the UK market under the new regime.
