Key Highlights

  • The UK Financial Conduct Authority said firms that control cryptoassets during settlement may fall outside safeguarding rules only where that control is temporary.

  • There is no broad exemption for “technical services” when firms are arranging deals in qualifying cryptoassets, putting some software and connectivity providers in scope.

  • The FCA opened the consultation on April 15 as part of a wider crypto rulebook the UK plans to bring into force by October 2027.

The UK’s latest crypto consultation has put software providers, wallet infrastructure firms, and staking businesses on notice, after the Financial Conduct Authority signaled that some firms could fall inside the regulatory perimeter even if they do not look like traditional custodians or brokers.

At the center of the issue is a 24-hour threshold buried in the FCA’s perimeter guidance. The regulator said a firm may avoid being treated as safeguarding cryptoassets during settlement only where its control of those assets is temporary, adding that in practice this is unlikely to require longer than 24 hours. That language could become a problem for firms whose systems hold, route, or operationally control client assets for longer than a single day.

The FCA said a firm can be considered to be safeguarding cryptoassets if it has the ability, “through any means,” to transfer them. That raises the compliance stakes for parts of the market that have often described themselves as pure software or infrastructure providers rather than regulated financial intermediaries.

Another pressure point is the FCA’s treatment of technical services. The paper says there is no specific exclusion from arranging deals in qualifying cryptoassets for firms simply because they provide software-based or connectivity services. In practice, that means a platform, app provider, or web interface may be caught if it does more than provide passive technology and plays a role in bringing transactions together.

The FCA launched the consultation on April 15 as part of a broader effort to build out the UK’s crypto regime, covering trading platforms, safeguarding, staking, and prudential standards. The regulator is seeking industry feedback now, with the wider framework expected to take effect in October 2027.