United Kingdom: registration today and the regime to come

What applies today: registration

There is no general financial-services licence for holding a crypto wallet in the United Kingdom today. The mandatory regime is registration with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which have covered cryptoasset businesses since January 10, 2020. A custodian wallet provider is a firm or sole practitioner who by way of business provides services "to safeguard, or to safeguard and administer" cryptoassets "on behalf of its customers", or private cryptographic keys on behalf of its customers "in order to hold, store and transfer cryptoassets" (reg. 14A(2)). A cryptoasset exchange provider, which exchanges or arranges the exchange of cryptoassets for money, money for cryptoassets, or one cryptoasset for another, must register too (reg. 14A(1)).

SourcesMLR 2017 reg. 14A

Which wallets are caught today

A custodial wallet, including one hosted by an exchange, safeguards cryptoassets or keys on behalf of customers, and its provider must register. A non-custodial software wallet, where the user alone holds the keys, is outside on the statutory wording: the provider does not safeguard anything on behalf of customers, and supplying wallet software is not an exchange service. The regulations contain no express carve-out for non-custodial wallets, so the conclusion rests on that wording and on the facts. The same reasoning applies to hardware wallets. Shared-control and smart-contract designs turn on whether the provider holds a key share or a recovery capability that lets it hold, store or transfer the assets. A wallet that bundles a swap the provider itself runs needs registration as an exchange provider for that feature.

SourcesMLR 2017 reg. 14A

The travel rule and marketing

Part 7A of the 2017 Regulations, in force since September 1, 2023 (SI 2022/860), requires cryptoasset businesses to collect and pass on information about the originator and the beneficiary of a transfer, including transfers to and from self-hosted wallets. Marketing is a separate gate. Since October 8, 2023, qualifying cryptoassets have been controlled investments (SI 2023/612), so a promotion to UK persons must be made by an FCA-authorised person, approved by one, made by or for a cryptoasset business registered with the FCA, or fall within an exemption. The FCA's rules (COBS 4.12A) require a personalised risk warning, a 24-hour cooling-off period for a firm's first-time investors, client categorisation and an appropriateness assessment. There is no general reverse-solicitation exemption in the UK crypto promotion regime.

SourcesMLR 2017·SI 2023/612·FCA COBS 4.12A

The regime to come: SI 2026/102

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102) were made on February 4, 2026 and come into force on October 25, 2027. Some provisions took effect earlier, 21 days after the instrument was made, so that the FCA could make rules, give guidance and receive applications. Part 3 inserts new regulated activities into the Regulated Activities Order: issuing a qualifying stablecoin (art. 9M), safeguarding qualifying cryptoassets (art. 9N), operating a qualifying cryptoasset trading platform (art. 9S), dealing as principal (art. 9T) and as agent (art. 9W), arranging deals (art. 9Y), and further exclusions and qualifying cryptoasset staking (arts. 9Z and 9Z1 to 9Z11). The custody activity is "the safeguarding of a qualifying cryptoasset or a relevant specified investment cryptoasset ('the cryptoasset') on behalf of another person", together with arranging for someone to carry it on (art. 9N(1)). Assets "held temporarily to facilitate the settlement of a transaction" are excluded (art. 9Q). A further draft instrument amending the 2026 Regulations is in consultation; its policy note was last updated on September 15, 2026, and it has no laying or commencement date.

SourcesSI 2026/102·HM Treasury policy note (draft amending SI)

The authorisation window

The FCA published its final policy statements on June 30, 2026 (PS26/9 to PS26/13), covering admissions and disclosures and market abuse, stablecoin issuance, regulated cryptoasset activities, a prudential regime and the application of the FCA Handbook. The window for authorisation applications runs from September 30, 2026 to February 28, 2027. The regime commences on October 25, 2027, and from that date the new activities require FCA authorisation.

SourcesFCA cryptoasset regime

Is a non-custodial wallet inside the new regime?

No express exclusion for pure software providers was found in the primary texts. The safeguarding activity turns on holding assets on another's behalf, so a provider that never controls keys or assets appears on its face to be outside it. But the drafting has no dedicated carve-out for software, and the boundary is what the FCA's consultation on cryptoasset perimeter guidance (CP26/13) addresses. As of September 28, 2026 the position under the 2017 Regulations is settled; the position under the new regime is not.

SourcesFCA CP26/13

New anti-money-laundering duties: SI 2026/621

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) were made on June 9, 2026. From February 1, 2027, a new regulation 34A requires enhanced customer due diligence where cryptoasset exchange providers and custodian wallet providers enter correspondent relationships. A substituted Schedule 6B, on control notifications for registered cryptoasset businesses, applies mostly from October 25, 2027. The instrument adds a definition of "cryptoasset business" (regulation 64B) and extends the confidentiality provisions of regulation 52A to those businesses. Regulation 14A itself is not amended.

SourcesSI 2026/621

Tax reporting from 2026

HMRC's guidance "Reporting cryptoasset user and transaction data" (published May 14, 2025, updated June 3, 2026) implements the OECD Crypto-Asset Reporting Framework. Providers of cryptoasset services in the United Kingdom must collect and report user and transaction data. The first reporting period runs from January 1 to December 31, 2026, and the first reports are due between January 1 and May 31, 2027.