The final legislation largely carries forward the core architecture consulted on in April, with the list of newly regulated activities remaining fundamentally intact. However, there have been a number of significant changes, including clarification around definitions, and the inclusion of new provisions governing cryptoasset public offers, disclosures and market abuse.
At the same time, the Financial Conduct Authority (FCA) published three consultation papers on regulating cryptoasset activities, the admissions and disclosures and market abuse regime for cryptoassets, and a prudential regime for cryptoasset firms which we will cover in separate blog posts.
Overview of the new regime
The draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (the CRAO) set out the legal basis for the FCA to regulate a range of activities in the UK in respect of ‘qualifying cryptoassets’ and ‘qualifying stablecoins’.
Regulated activities and exclusions
The CRAO amends the existing Financial Services and Markets Act (Regulated Activities) Order 2001 to specify new regulated activities including: issuing qualifying stablecoin; safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets; operating a qualifying cryptoasset trading platform; dealing in qualifying cryptoassets as principal or agent; arranging deals in qualifying cryptoassets; and qualifying cryptoasset staking.
The definition of ‘issuing qualifying stablecoin’ has been amended. It now requires a firm to carry on all of the following activities from a UK establishment: (i) the offer (or arrangements for the offer) of a qualifying stablecoin, which was created by (or on behalf of) the offeror or a member of its group; (ii) redemption of such qualifying stablecoins; and (iii) maintenance of the qualifying stablecoins value (e.g. by holding fiat or other assets). Minting alone is expressly excluded from issuance.
The final legislation also introduces new exclusions, including for activities carried on ‘for the sale of goods or supply of services’, as well as making amendments to existing exclusions. Additional activity-specific exclusions apply, for example to dealing/arranging where cryptoassets are acquired or transferred for no consideration, or where distribution arises as a protocol reward.
Territorial scope
The CRAO amends section 418 FSMA to set clear UK nexus tests for cryptoasset activities; it is designed to capture material UK-facing activity even where a firm has an overseas base. Firms which offer cryptoasset or stablecoin related services to UK customers will be caught by the new rules even if they are based overseas. However, carve-outs will apply to some firms which, for example, deal exclusively with institutional clients or act through licensed intermediaries.
Cryptoassets admissions and disclosures regime
New provisions included in the final legislation create designated activities for public offers of qualifying cryptoassets and the admission of qualifying cryptoassets to trading. Rules will also apply to any related disclosures. Exemptions apply in limited circumstances.
A new designated activity regime shall govern public offers of qualifying cryptoassets and admissions to trading on qualifying cryptoasset trading platforms, replacing the prior Financial Promotion Order (FPO) cryptoasset exemption with a purpose-built framework. Public offers to the UK are generally prohibited unless an exemption applies (e.g. small offers up to £1,000,000; offers solely to qualified investors; fewer than 150 offerees; minimum £100,000 per investor; or offers of qualifying stablecoin by authorised issuers). The FCA may make designated activity rules for disclosures and liability. Where offerors rely on an exemption, material information provided to prospective buyers must be incorporated into the applicable disclosure document or otherwise disclosed to the audience of the offer.
The FCA may set content, responsibility and form requirements for disclosure documents via designated activity rules, and persons responsible for such documents face civil liability for untrue or misleading statements or required omissions, subject to comprehensive exemptions and a protected forward‑looking statements safe harbour defined by FCA rules. Purchasers may be granted withdrawal rights through FCA rules, with consequences for non‑compliance.
Market abuse regime for cryptoassets
A crypto-specific market abuse regime will apply to relevant qualifying cryptoassets admitted or seeking admission to trading, and to related instruments, mirroring familiar MAR concepts: inside information, insider dealing, unlawful disclosure and market manipulation. Firms within scope must implement systems and procedures to prevent, detect and disrupt abuse; notify trading platforms of suspicious orders/transactions; maintain insider lists; and comply with information-sharing provisions under FCA rules. The FCA may designate legitimate cryptoasset market practices and set detailed rule requirements.
Consequential changes
The CRAO makes consequential amendments to existing anti-money laundering and financial promotions requirements for cryptoasset firms to reflect the new regulatory perimeter.
Beyond the changes the FPO to recognise crypto disclosure documents (see above), these consequential amendments include: (i) exclusion of the regulated issuance of a qualifying stablecoin from being a payment service under the Payment Services Regulations 2017; (ii) amendment to the definition of “monetary value” in the Electronic Money Regulations 2011 to exclude stablecoins and their backing assets; (iii) amendments to the funds legislation to exclude specified qualifying stablecoin “backing” arrangements from constituting alternative investment funds or collective investment schemes, subject to conditions (e.g. no interest or yield to holders); and (iv) amendments to the Money Laundering Regulations to dovetail with the new authorisation perimeter and to require authorised firms and specified investment cryptoasset firms to notify the FCA if acting as cryptoasset exchange or custodian wallet providers.
Transitional and savings provisions
Transitional measures will allow firms to apply to the FCA for a licence ahead of the regime’s start date and to continue providing services while their applications are being considered, though applications may be made outside that window. A savings provision applies for applicants who file within the relevant application period and remain undetermined at the CRAO go-live date; an applicant will be able to continue their activities under the pre-go-live position for up to two years.
Next steps
The timeline is now fixed. Parliamentary approval is expected in 2026, and the regime will then go live on 25 October 2027.
The FCA and Prudential Regulation Authority is empowered under the CRAO to consult and make designated activity rules and general rules ahead of the go-live date.
Watch out in the coming days for our blog posts on the recently published FCA consultation papers. Please also join us in January for a series of webinars, as we delve deeper into the detail of the UK’s new crypto regime.
