UK Crypto Regulators Clarify Software Development is Not Regulated Activity

The UK's Financial Conduct Authority (FCA) has issued its final guidance on the regulatory perimeter for cryptoassets, clarifying that developing software is not a regulated activity. The FCA's PS26/18 guidance addresses practical issues raised during prior consultations and provides clarity on what constitutes regulated intermediation versus technical provision. With the authorization application window opening on September 30, firms must now navigate these regulations to ensure compliance.

The FCA's guidance emphasizes the need for clarity on the implications of upcoming legislative changes, which may impact various crypto operations. While developing software is not considered a regulated activity, firms providing analytics or dashboards are also exempt from arranging deals under this new framework.

Firms face uncertainty as they prepare for the authorization application process, with some regulatory aspects still unclear. However, the FCA has indicated that further amendments to the guidance will be consulted on later this year.