UK Cryptoasset Registration: What It Really Means

In the United Kingdom there is no separate cryptocurrency license uk. Instead, firms that carry on cryptoasset business in the UK must register with the Financial Conduct Authority (FCA) under the Money Laundering Regulations (MLRs). This regime focuses on anti-money laundering (AML) and counter-terrorist financing (CTF) compliance. It is important to understand that this registration is not the same as FCA authorisation for regulated financial activities under the Financial Services and Markets Act (FSMA).

Who Must Register

Registration is mandatory if you are operating a business in the UK that:

• Provides exchange services between fiat and crypto, or crypto-to-crypto.
• Operates a trading platform or facilitates peer-to-peer exchange.
• Issues new cryptoassets, for example through an ICO.
• Provides custodian wallet services, including safeguarding and administering private keys.
• Operates crypto ATMs.

The FCA also expects firms to demonstrate a genuine UK presence, with decision-making and compliance functions managed in the country. A strong local governance structure and an independent Money Laundering Reporting Officer (MLRO) are essential.

The Application Process

Applications are submitted through the FCA Connect portal. A non-refundable application fee of £11,150 applies. The process typically requires a comprehensive package of documents, including:

• A detailed business plan and financial forecasts.
• A business-wide AML/CTF risk assessment.
• Policies and procedures covering KYC, sanctions screening, transaction monitoring, enhanced due diligence, and compliance with the Travel Rule.
• Information about governance, outsourcing arrangements, and staff training.
• Details of directors, beneficial owners, and senior managers, with evidence of their fitness and propriety.

The FCA will only begin its formal three-month decision clock once the application is considered complete. In practice, the process often takes longer, as the regulator may request additional information and clarifications.

FCA Assessment

During the review, the FCA assesses:

• The effectiveness of the firm’s AML and CTF systems.
• The fitness and propriety of owners, directors, and key managers.
• The sustainability and viability of the business model.
• The level of UK-based oversight and governance.

If approved, the firm is added to the public FCA Cryptoasset Register.

Ongoing Obligations

Being registered is not the end of the process. Firms must continuously comply with regulatory requirements, including:

• Filing the Annual Financial Crime Report (known as REP-CRIM) within 60 business days of the accounting reference date.
• Implementing the Travel Rule by collecting and transmitting payer and payee information for cryptoasset transfers, and dealing appropriately with missing or incomplete data.
• Complying with the UK’s financial promotions regime, which since October 2023 sets strict rules on how crypto can be advertised to retail consumers. Firms must use one of the lawful routes for promotions, include standardised risk warnings, provide cooling-off periods for first-time investors, and avoid prohibited incentives.
• Maintaining effective UK-based governance, including a competent and independent MLRO.
• Keeping AML programmes aligned with recognised best practice, such as the Joint Money Laundering Steering Group (JMLSG) guidance.

When Additional FCA Authorisation May Be Needed

MLR registration only covers AML/CTF supervision. If a firm also deals in regulated securities, issues e-money, or provides payment services, it must obtain the relevant authorisations under FSMA, the Payment Services Regulations, or the Electronic Money Regulations. The UK government is also in the process of building a broader regulatory framework that will in future bring stablecoins and other crypto activities into full FCA authorisation.

Registering with the FCA is a demanding and resource-intensive process. It requires a strong compliance framework, evidence of genuine UK presence, and significant investment in governance, systems, and reporting. Many firms turn to specialist legal and compliance advisors to navigate the process successfully.

Recommendations for Crypto-active Companies

• Check your registration status: If your company was previously registered only under MLR, you must now undergo the full FCA authorization process.
• Prepare for new requirements: Expect new rules regarding capital, liquidity, and risk management to be introduced, and start preparing to comply with them.
• Update KYC and AML procedures: Ensure that your anti-money laundering and customer verification procedures comply with the latest FCA requirements.
• Comply with advertising rules: Check that your advertising activities comply with the new rules that came into force in 2023.