Crypto Moves Inside the UK’s Financial Rulebook
The UK is preparing a major regulatory shift that will place cryptocurrencies under the same legal framework as traditional financial products starting in 2027. Digital assets such as Bitcoin, Ethereum, and stablecoins will be regulated in a manner similar to stocks, bonds, and other mainstream instruments, with oversight handed to the Financial Conduct Authority (FCA).
Officials say the move is designed to boost transparency, protect consumers, and give regulators stronger enforcement powers against fraud, market abuse, and sanctions violations. By bringing crypto fully inside the financial perimeter, the government believes it can restore confidence while allowing the sector to grow under clear and enforceable rules.
Lucy Rigby, the minister for the City of London, said the aim is to make the UK a preferred destination for crypto firms.
Treasury Prepares New Crypto Legislation
According to the UK Treasury, new legislation will be introduced in Parliament in the coming months to formally extend existing financial services laws to crypto firms. These reforms are intended to strengthen investor protection, eliminate regulatory ambiguity, and reinforce the UK’s status as a global financial hub in the digital economy.
Chancellor Rachel Reeves framed the changes as a growth-oriented move rather than a crackdown.
Reeves added that the rules would provide certainty for legitimate businesses while shutting dishonest operators out of the UK market.
Under the upcoming framework, crypto exchanges, wallet providers, and other service platforms will be required to register with the FCA and comply with anti-money laundering (AML) and compliance obligations already imposed on traditional financial institutions.
Consumer Protection Drives the Regulatory Push
The regulatory overhaul follows rising concerns over scams and fraud, particularly among UK retail investors. Authorities have pointed to a surge in losses linked to fake crypto projects and misleading investment schemes, many of which have exploited regulatory gaps.
In September, a UK court convicted Zhimin Qian, a Chinese national, over a massive Bitcoin-related fraud that impacted more than 100,000 victims. Prosecutors said the scheme, which ran between 2014 and 2017, caused losses across 128,000 individuals. Qian later pleaded guilty to acquiring and possessing criminally linked cryptocurrency, underscoring the risks posed by weak oversight.
Officials argue that treating crypto like other regulated financial products will give regulators earlier intervention tools and reduce the scope for similar abuses.
Government Moves Toward Banning Crypto Political Donations
Alongside market regulation, UK ministers are also considering banning cryptocurrency political donations, citing concerns over traceability and election integrity. While crypto donations are not expected to be included in the upcoming elections bill, lawmakers remain uneasy about their anonymous nature.
The issue has already drawn attention due to Reform UK, led by Nigel Farage, which recently accepted its first registerable crypto donations and operates a dedicated fundraising portal with enhanced verification checks.
Former Cabinet Office minister Pat McFadden previously said the Electoral Commission should scrutinize crypto donations, stressing the importance of knowing who the donors are and whether contributions are legitimate. However, Electoral Commission CEO Vijay Rangarajan has argued that a ban may be unnecessary, noting that political parties already receive non-traditional donations such as art, travel, or asset usage that can also be difficult to value.
Any ban would still require separate legislation, and debate on the issue remains ongoing.
