UK FCA opens DeFi guidance and crypto exclusions consultations

Britain's Financial Conduct Authority (FCA) has opened two consultations that shape how decentralised finance will fit into the UK's new crypto regime: draft guidance for regulated firms that use DeFi, and guidance on a fresh set of exclusions from crypto regulation. Both were published on Wednesday, 21 October, and close on 18 November 2026, according to the FCA's pages for GC26/7 and CP26/36. Cointelegraph first reported the move.

GC26/7: DeFi guidance for regulated firms

The first paper is aimed at FCA-regulated firms that provide financial services using DeFi — not at protocols themselves.

• It focuses on operational resilience (rules in SYSC 15A) and financial crime, including the UK Money Laundering Regulations.
• It describes the current risk landscape and gives illustrative examples of controls firms might consider.
• The FCA says the guidance is meant to clarify existing rules rather than set new policy.

The regulator defines DeFi broadly: financial services run on distributed ledgers with heavy automation, open and interoperable technology and, in some cases, no traditional middleman. Those features, it says, can raise resilience and financial-crime risks for firms and their clients. (New to the term? See our explainer on what DeFi is.)

CP26/36: what falls outside the rules

The second paper explains new exclusions introduced by the government's draft Cryptoassets (Miscellaneous Amendments) Regulations 2026. According to the FCA, they include:

• temporary settlement arrangements and temporary holdings of UK qualifying stablecoins made for payment transactions;
• arrangements involving the backing assets of a UK qualifying stablecoin;
• some proprietary trading, including acting as a market maker on a regulated trading platform;
• technical services that merely give access to a third party's service or to a decentralised protocol.

The FCA acknowledged that the late timing of the legislation created uncertainty for a small number of firms. Applicants hit by the technical-services question can get extra time to complete the "arranging" part of an otherwise complete application.

Timeline

The authorisation window opened on 30 September and runs to 28 February 2027. Final guidance is planned for January 2027, and the regime takes effect on 25 October 2027.

The UK Cryptoasset Business Council welcomed the papers but said the FCA "needs to get this right" so responsible DeFi innovation stays in the country. The UK move lands as the EU debates how far MiCA should reach into DeFi — see our MiCA explainer and the French push for DeFi liability rules.