Crypto Firms, Meet the FCA Rulebook (Well… Most of It)

Big news for crypto firms, Web3 builders, and anyone tracking UK crypto regulation: the FCA has just published CP25/25 – Application of FCA Handbook for Regulated Cryptoasset Activities.

This consultation paper marks the clearest sign yet that UK crypto businesses will soon be brought firmly into the FCA’s regulatory perimeter. Think: conduct rules, governance standards, client protections – the same FCA rulebook used for investment firms now being extended to cryptoasset activities.

Before you panic and Google “COBS crypto FCA” or “FCA crypto rules 2025,” we’ve got you. Here’s what this all means, what’s in (and out) of scope, and how to get ahead of the upcoming FCA cryptoasset regime.

💡 So, what’s CP25/25 all about?

At its core, CP25/25 proposes treating crypto activities (like issuing stablecoins, safeguarding qualifying cryptoassets, or handling specified investment cryptoassets) as “designated investment business.”
That single change pulls firms into a whole set of FCA regimes for crypto firms, including:

• Conduct of Business (COBS): suitability, disclosures, best execution.
• Systems & Controls (SYSC): governance, risk management, oversight.
• Client Money (CASS): safeguarding customer assets in some cases.
• Senior Managers & Certification Regime (SM&CR): leadership accountability, with senior managers carrying personal responsibility.
• Operational Resilience: rules on continuity, disruption, and testing.

It’s a clear signal that crypto firms won’t be treated as exotic outliers anymore – but as another form of regulated financial service under the FCA crypto compliance framework.

❌ What’s not on the table (yet)?

Interestingly, the FCA has chosen not to apply the Consumer Duty (for now) to regulated cryptoasset activities. Instead, it’s weighing two options:

1. Apply the Consumer Duty with crypto-specific tweaks, or
2. Skip it entirely and rely on existing FCA crypto compliance rules to deliver similar outcomes.

(Translation: watch this space. Consumer Duty for crypto firms could still land later.)

We’re also waiting for final changes to the Regulated Activities Order, which will legally “switch on” crypto activities as regulated activity in the UK. Until then, the UK cryptoasset regulation framework isn’t fully locked in.

🚨 Why it matters for crypto firms

If these FCA crypto rules are finalised, expect some big shifts in how UK crypto companies operate:

• Senior managers on the hook: SMCR is a cultural reset.
• Compliance uplift: policies and processes must look like those in FCA-regulated investment firms.
• Resilience expectations: business continuity and incident management need to be stress-tested under FCA operational resilience standards.
• DLT clarity: good news is that permissionless blockchains won’t be classed as “outsourcing.”

This isn’t light-touch oversight – it’s the FCA signalling that crypto regulation in the UK is moving out of the grey zone and into the mainstream.

🧠 What should your startup be doing now?

Here’s your FCA crypto compliance checklist:

✅ Engage with the FCA consultation (CP25/25): this is your best chance to shape FCA crypto regulations before they’re final.
✅ Map your services: identify which FCA regimes (COBS, CASS, SYSC, SM&CR) you’ll be caught by.
✅ Review governance: are leadership and compliance functions ready for FCA SMCR crypto oversight?
✅ Check money flows: if you hold customer funds, consider your CASS obligations.
✅ Stress-test resilience: make sure your operational resilience plans meet FCA expectations.

💥 Bottom line: FCA regulation is coming fast

The FCA wants crypto firms in the UK to be held to the same standards as investment firms. For founders, that means more compliance, but also more legitimacy and investor trust.

Handled right, this doesn’t have to be a blocker. It’s a chance to strengthen governance, build credibility with investors, and future-proof your business within the UK crypto regulatory framework.

Need help mapping where you stand under CP25/25 or stress-testing your crypto compliance roadmap?

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That’s exactly what we do at Founders Law, helping Web3 and fintech startups navigate the FCA crypto authorisation process and turn regulation into a growth advantage - Get in touch today 👊

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