Russian
English
License for an Exchange of Cryptocurrency in the United Kingdom
Obtaining a Cryptocurrency License in the United Kingdom
Obtaining a cryptocurrency license in the United Kingdom provides the opportunity to operate in one of the most highly regulated financial markets in the world. However, it requires registration with the Financial Conduct Authority (FCA) and strict compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
In this guide, we will explore which companies must register, the steps involved in the registration process, and the potential consequences of failing to comply with established regulations.
How to Get a Crypto License in the UK Under FCA Regulations
Obtaining a cryptocurrency license in the UK entails adhering to specific rules and procedures set out by the FCA. Companies dealing with cryptoassets are required to register with the FCA and comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
Who Must Register?
Cryptoasset Exchange Providers
- Centralized and decentralized exchanges (CEX, DEX), OTC desks
- Peer-to-peer (P2P) platforms for crypto trading
- Marketplaces enabling users to exchange digital assets
Custodian Wallet Providers:
- Companies storing cryptocurrencies on behalf of users
- Exchanges offering custodial wallet services
-
Brokers and fintech platforms providing wallets with key management
Crypto ATM Operators:
- Businesses installing ATMs for buying/selling cryptocurrencies
- Any services granting access to cryptoassets via physical devices
ICO, IEO, STO, and Similar Services:
Companies organizing initial token offerings
Platforms facilitating and managing ICOs/IEOs/STOs
Crypto Payment Services:
- Payment gateways working with cryptocurrencies
- Companies offering crypto payment processing for businesses
Crypto Lending and Borrowing Services:
- Platforms offering loans in cryptoassets
- Deposit services such as staking or lending pools
Centralized DeFi Services:
- Platforms offering financial services with controlled assets
-
Crypto funds and centralized investment platforms
Issuing cryptoassets in the UK may require FCA registration, depending on the type and use of the tokens
Registration is mandatory if the tokens fall under regulated categories:
- Security Tokens:
Tokens that grant rights to equity, dividends, or voting in a company are treated as securities and regulated accordingly. - Electronic Money Tokens:
Tokens used for payments and pegged to fiat currencies (e.g., stablecoins). - Utility Tokens (with financial characteristics):
If the FCA classifies them as financial instruments suitable for investment or financial transactions, registration may be required.
Registration is NOT required for:
- Pure Utility Tokens:
Used solely for accessing a product or service. - Not intended for investment (e.g., in-game tokens for purchasing virtual items).
- To register, a company must submit detailed information about its structure, key personnel, and AML/CTF compliance procedures. The FCA conducts a thorough review, and the registration process can be time-consuming.
Applicant Requirements
Companies must demonstrate effective measures to prevent the misuse of their services for illegal purposes. This includes conducting Know Your Customer (KYC) checks, monitoring transactions, and reporting suspicious activities.
Consequences of Non-Compliance
Failure to register and comply with AML/CTF regulations can result in severe penalties, including fines and prohibition from operating. The FCA is empowered to take enforcement action against companies that fail to meet regulatory standards.
Final Thoughts
Obtaining a cryptocurrency license in the UK requires careful preparation and strict compliance with regulatory requirements. Given the complexity of the process and the high standards imposed by the FCA, it is crucial to approach this task with the utmost diligence.
Our company, Law&Trust International, offers comprehensive services for FCA registration, assisting clients through every step of the process and ensuring full legal compliance. Contact us to receive professional support and expert consultation on all related matters.
