UK Crypto Firms Get Green Light to Operate Under New Rules Starting October 25th, 2027

UK crypto firms can now apply for authorization as of September 30th, bringing Bitcoin holders closer to a rulebook that treats coins pledged as qualifying borrowing collateral differently from coins transferred into lending for yield.

The Financial Conduct Authority allows firms to apply for authorization or vary their permissions through its Connect system. However, the safeguards in the rules it finalized on June 30th are forthcoming, with the new regime expected to begin on October 25th, 2027.

Under the future rules, covered custody generally requires a safeguarding trust under CASS 17, the crypto custody chapter of the FCA's Client Assets Sourcebook. Retail collateral supporting an in-scope crypto borrowing service must remain safeguarded, with a narrow debt-discharge exception.