In March 2022, the Financial Conduct Authority (FCA) took a harsh stance during the UK’s laissez-faire era when it ended its Temporary Registration Regime (TRR) for cryptoasset enterprises.
After the regulator found vulnerabilities related to financial crime and anti-money-laundering (AML), several applicants withdrew or were refused, leaving only 33 firms with full registration.
Retail investors in the UK have seen increased activity move overseas as a result of domestic regulatory tightening, rather than a disappearance of fundamental demand for cryptocurrency. This conflict is seen in the persistence of risky presales like BTC hyper coin, a layer-2 project with a Bitcoin theme that claims to facilitate DeFi-style staking on an independent high-throughput chain and accelerate BTC transactions. This presale has brought in tens of millions of dollars from investors all over the world, including those outside the jurisdiction of the Financial Conduct Authority (FCA), according to recent coverage in specialized media.
The TRR was always only a stopgap measure. It was introduced in 2020 and it allowed businesses that had already applied to be registered under UK anti-money-laundering laws to continue running while their applications were being reviewed by the Financial Conduct Authority (FCA).
After a one-time extension from July 2021 to March 31, 2022, the regulator finally shut down the regime. This came with threatening criminal penalties for unregistered enterprises that persisted in serving clients in the UK. Companies like Wirex, which withdrew its application and shifted its focus to serving the UK from the EU, were among those who opted to move or serve British consumers from other jurisdictions as a result.
The United Kingdom has been working on a more extensive structure ever since. The “future financial services regulatory regime for cryptoassets” was announced by HM Treasury in February 2023, and by October 2023, the department had finalized its intentions to include various exchange, custody, and lending operations within the purview of the Financial Services and Markets Act (FSMA).
To transform portions of the cryptocurrency industry into fully-fledged financial services governed by FCA authorization and conduct regulations, a proposed Statutory Instrument was released in April 2025 outlining the creation of new regulated activities for cryptoassets under the Regulated Activities Order.
However, the financial promotions system has been the most noticeable change for corporations. Any company advertising “qualifying cryptoassets” to customers in the United Kingdom would be subject to criminal penalties if they do not follow the FSMA promotion guidelines as of October 8, 2023.
Authorization or relying on specific categories of investors are all necessary. Following this, the FCA has been quite vocal about its intentions to test the new powers in court by issuing a number of warnings and detailed guidelines.
In October 2025, it took things a step further by suing the exchange HTX (previously Huobi) for alleged unlawful advertisements. The Financial Times discovered that over half of the cryptocurrency ads flagged to platforms between October 2023 and October 2024 were still live, indicating that enforcement is still ongoing.
At the same time, systemic stablecoins are being developed by the Bank of England. The proposed regulations for stablecoins denominated in sterling were laid out in a consultation paper that came out in November 2025. These regulations include a requirement that 40% of reserves be kept in interest-free accounts at the central bank and a limitation that up to 60% of reserves can be held in short-term UK government debt.
According to the FCA, traditional conduct norms may need to be adjusted for such a risky asset class as cryptocurrency. Therefore newly regulated crypto operations will first operate outside of the UK’s expansive consumer duty regulations when their authority grows in 2026.