UK to extend financial rules to crypto firms by October 2027

The United Kingdom will begin regulating cryptoassets in October 2027. The finance ministry plans to introduce a bill extending existing financial rules to companies that offer crypto services to strengthen investor protection and market integrity.

The legislation, to be presented to Parliament, would place crypto firms within the same regulatory perimeter as other financial services. The approach aligns more closely with the United States than with the European Union, whose Markets in Cryptoassets framework took effect in 2024. A ministry spokesperson indicated the draft published earlier this year has only minor changes.

Officials describe the goal as providing clear standards for firms and safeguards for consumers. The United Kingdom intends to work with the United States on digital assets through a transatlantic taskforce. Regulators continue to warn that crypto is high risk and that investors should be prepared to lose all of their money.

Rulemaking is underway ahead of the effective date. The Financial Conduct Authority is developing rules for trading and market abuse, custody, and token issuance. The Bank of England recently set out proposals for supervising stablecoins used for everyday payments. Both agencies aim to finalize their rulebooks by the end of 2026.

Finance Minister Rachel Reeves described the rules as “clear rules of the road” that will strengthen consumer protections and keep “dodgy actors” out of the market.

Some legal practitioners want further revisions before enactment. Natalie Lewis, a partner at Travers Smith, expressed hope the final legislation will be “more than minor,” citing “quite a few technical legal problems” in the original draft.

Industry participants view the timetable as offering planning certainty. Daniel Slutzkin, head of UK at crypto exchange Gemini, noted that firms had “long awaited regulatory clarity” and can begin preparing to meet the new requirements.

As we reported earlier, the UK enacted the Property (Digital Assets etc) Act, confirming cryptocurrencies, stablecoins, and other digital items can be treated as personal property, following royal assent announced in the House of Lords by Lord Speaker John McFall.

The law codifies case law so disputes and recoveries face less ambiguity, and writes into statute what courts had recognized in individual judgments. It closes a gap in English and Welsh doctrine that split property into tangible things and things in action, and reflects a 2024 Law Commission recommendation to protect certain digital assets.