Do I need to be authorised?

You should read our guidance on Cryptoassets and in particular, read chapters 2 and 3 which cover regulated tokens (security tokens and e-tokens) and unregulated tokens. Page 30 of this document has a flow diagram which may also help you determine if authorisation is required.

Authorisation?

You’ll need to be authorised by the FCA if you’re carrying on a regulated activity by way of business in the UK involving a cryptoasset, for example if you’re carrying on a specified activity (eg arranging deals in investments) in relation to a cryptoasset that is a specified investment (eg a security token), unless you can rely on an exemption (see PERG 2.10).

If you engage in regulated activity without being authorised or exempt, you may be criminally prosecuted and may face up to 2 years’ imprisonment or an unlimited fine or both. If you are already authorised but do not have the correct permissions for the regulated activity you’re carrying on, you may face enforcement action by the FCA.

Cryptoassets - AML/CTF Regime

Since 10 January 2020, businesses seeking to carry on business in the UK as a cryptoasset exchange provider or custodian wallet provider have needed to be registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘MLRs’).

The following information on our website will help you determine if you need to register with us.

Cryptoassets - Financial Promotions

As of 8 October 2023, the financial promotion regime applies to firms marketing most cryptoassets and certain cryptoasset-related services in the UK, regardless of whether the firm is based overseas or what technology is used to make the communication.

Under the new rules there are four routes for lawfully communicating crypto promotions:

  • An authorised person communicates the promotion.
  • An authorised person approves the promotion. (Note that from 7 February 2024, only authorised persons with a specific permission, or which have applied for a specific permission during an initial application window, will be able to approve financial promotions for unauthorised persons unless an exemption applies).
  • The promotion is communicated by or on behalf of a cryptoasset firm registered under the MLRs.
  • The promotion otherwise complies with the conditions of an exemption in the Financial Promotion Order.

For more information about changes to the regime for authorised persons approving financial promotions, please see PS23/13: Introducing a gateway for firms who approve financial promotions

Payment Services and e-money

In the case of e-money tokens you’ll need to be authorised by the FCA if you’re carrying out regulated payment services activities as a regular occupation or business activity or issuing e-money in the UK and you can’t rely on an exclusion in Perg 3A.1 (if you are applying to be an e-money institution) or Perg 15 (for Payment Services Institutions).

The following information on our website will help you determine if authorisation is required.

Authorisation and registration: e-money institutions (EMI) and payment institutions (PI)

You should also read our Payment Services and Electronic Money - Our Approach. You may find it helpful to review:

  • Chapter 1 - Introduction
  • Chapter 2 - Scope

You should also read the following PERG guidance:

  • PERG 3A - Guidance on the scope of the Electronic Money Regulations 2011
  • PERG 15 - Guidance on the scope of the Payment Services Regulations 2017