Crypto License in the United Kingdom
Last Update: 13.11.2025
The United Kingdom and its Crown Dependencies offer a favorable regulatory environment for innovative digital businesses, including those involved in mining, crypto exchanges, and electronic money transactions. This jurisdiction is a popular destination for blockchain and ICO startups. Gofaizen & Sherle offers expert support in the process of registering and obtaining license to work with crypto activities in United Kingdom.
Today, the UK is considered one of the most attractive jurisdictions for setting up cryptocurrency companies, despite the fact that cryptocurrency businesses are not currently subject to full government licensing.
Officially, cryptocurrency exchanges in the UK are not subject to government licensing, and no cryptocurrency license is required in the country. However, a few years ago, the Financial Conduct Authority (FCA) created the Innovation Hub, a platform that provides advisory legal support to cryptocurrency market participants and interested parties. Registration on this platform is not mandatory, which has created some uncertainty regarding the licensing of cryptocurrencies in the UK.
In addition, there is currently no universal global definition of a crypto asset in the UK. The UK Crypto Assets Task Force, which includes the FCA, Her Majesty’s Treasury (HMT) and the Bank of England (BoE), has defined crypto assets as “digital representations of value or contractual rights that are cryptographically secured, use distributed ledger technology, and can be transferred, stored, or sold electronically.” The working group identified three primary categories of cryptoassets:
- Exchange tokens (“cryptocurrencies”), such as Bitcoin and Ether, which use distributed ledger technology (DLT). They are not issued or backed by a central bank or other central authority and do not provide the types of rights or access typical of securities or utility tokens. They are used as a means of exchange or for investment.
- Security tokens are “specified investments” under the Financial Services and Markets Act (2000). They may provide rights such as ownership, the return of a specified amount of money, or a share in future profits. Security tokens may also be considered securities or financial instruments under the EU Markets in Financial Instruments Directive II (MiFID II).
- Utility tokens can be exchanged for access to a specific product or service.
In its Guidelines (2019), the FCA added another type of token—electronic money tokens (e-money)—which meet the definition of electronic money set out in the Electronic Money Rules (2018).
In 2021, Chancellor of the Exchequer Rishi Sunak tasked the Bank of England with organizing research into the introduction of a potential central bank digital currency (CBDC) or national cryptocurrency.
It was envisaged that a new digital version of the pound sterling, unofficially named “Britcoin,” would allow businesses and consumers to hold accounts directly with the Bank of England, increase access to central bank funds, speed up domestic and international payments, and reduce risks to financial stability. It is important to note that, in theory, a CBDC would not replace cash or existing bank accounts. However, to date, the government and the Bank of England have not made a formal decision on the introduction of a CBDC in the United Kingdom.
In April 2022, the government committed to introducing a new regulatory regime for cryptoassets that takes into account the risks and opportunities associated with them. As a result of this work, a consultation paper was published on February 1, 2023. It sets out proposals for a future regulatory regime, which is the next step in the government’s approach to regulating cryptoassets. These proposals build on previous proposals from the HM Treasury, which focused on stablecoins and the financial development of cryptoassets. These proposals aim to achieve the ambition of establishing the UK as a leader in cryptoasset technology and innovation in the financial sector, as well as creating a favorable environment for cryptoasset service providers to operate and grow in the UK, while managing potential risks to consumers and financial stability.
If a project involves the issuance or circulation of security tokens (i.e., tokens that have the characteristics of securities), it may additionally fall under the Financial Services and Markets Act 2000 (FSMA). In this case, separate regulation and, possibly, a license to carry out regulated investment activities will be required. Thus, although there is formally only one type of registration in the UK, it covers a wide range of cryptocurrency services and can be adapted to specific business models. This approach makes the UK system flexible but requires applicants to have accurate legal and operational preparation for their project.
Advantages of the UK crypto license
Low corporate tax and preferential taxation of cryptocurrencies.
The UK offers competitive corporate tax rates (the current rate is 19%). The UK treats cryptocurrencies as property rather than currency and applies capital gains tax to cryptocurrency assets. This means that capital gains tax may apply to profits from disposing of cryptoassets, rather than treating them as foreign currency gains. In addition, VAT is not levied on the sale and purchase of cryptocurrencies.
Simple and flexible crypto company registration process.
The process of registering a cryptocurrency company in the UK is relatively simple and transparent. You can choose between different forms of organization, such as a limited legal entity or an innovative company. This allows you to choose the structure that best suits your business needs.
Potential access to the EU market through a UK crypto license.
Access to the European market. Although the UK has officially left the European Union, it still maintains close ties with the EU. Obtaining a crypto license in the UK can give you the advantage of passporting, allowing you to operate in the European Economic Area without additional licenses in each EU member state.
A developed ecosystem for fintech and blockchain startups.
The UK has a thriving ecosystem for fintech and blockchain startups, with numerous incubators, accelerators, and venture capital funds focused on supporting innovative cryptocurrency companies. This ecosystem provides opportunities for networking, mentoring, and potential collaboration.
The convenience of the English language and a stable legal system.
Doing business in the UK offers the advantage of using English as the primary language of communication, which simplifies interaction with international partners and customers. In addition, the UK operates under a common law system known for its stability and predictability.
Contact us now! Get prompt advice and a commercial offer.
Service packages for obtaining a crypto license in the UK
Ideal for companies looking to quickly enter the UK crypto market with essential compliance.
- Turnkey Company Formation
- Registration as VASP with the Regulator (FCA)
- Registered legal company address for 1 year
- Basic (mandatory) AML/KYC Policy
Best suited for teams that need full guidance through compliance and setup, with banking and regulatory support.
- ALL services from Basic Package
- Full communication with the FCA/VASP authority during authorization process
- Translated and apostilled set of corporate documents
- Assistance with opening a business bank account for crypto-related operations
- AML/MLRO officer selection support (requirements, sourcing, interviewing, contract assistance)
Full end-to-end crypto company setup and tailored compliance solutions. Ideal for institutional-level clients or complex business models.
- ALL services from Advanced Package
- In-depth analysis of your business model, website, and internal documentation
- Full customization of AML/CFT policies and risk matrix
- Preparation of legal memorandums or opinions if needed
- Ongoing legal support during and post-registration (FCA correspondence, reporting, etc.)
Requirements for obtaining a United Kingdom crypto license
Before applying for a crypto license, it is important to determine whether your activities require mandatory registration with the FCA. Registration is mandatory if the company provides services for exchanging cryptocurrencies for fiat or other tokens, uses crypto ATMs, participates in ICOs, or stores crypto assets or customer keys on behalf of third parties. In doing so, the FCA assesses whether the activity is carried out in the UK and on a commercial basis.
Below are the main requirements for companies applying for a crypto license:
Company registration in the UK.
The organization must be registered as a legal entity in the UK. This confirms its legal status and compliance with local law.
Physical office.
The company must have a valid office in the UK. A nominal address or registration agent is not sufficient — the FCA requires a physical presence.
Appointment of at least one UK-resident director.
At least one director of the company must be a UK resident with a good business reputation, management experience, and relevant knowledge in finance and compliance.
Compliance with AML/CTF requirements.
The company must implement and maintain a system to combat money laundering and terrorist financing by the MLRs (Money Laundering Regulations). This includes:
- developing and implementing internal AML/CTF policies;
- conducting risk assessments related to operations and clients;
- implementing CDD and EDD procedures (including KYC, transaction monitoring, source of funds identification);
- reporting suspicious transactions to the NCA.
Appointment of an MLRO (Money Laundering Reporting Officer).
A qualified MLRO (Money Laundering Reporting Officer) with knowledge of regulation, the crypto industry, and AML risks is required. This person must be independent, have administrative authority, and be based in the UK.
Preparation of a package of documents.
The application is submitted through the FCA Connect system and includes:
- a program of operations, business plan, and marketing strategy;
- a description of IT systems and cybersecurity measures;
- a complete company structure, including outsourcing;
- internal procedures for AML/CTF, CDD/EDD, monitoring, and risk management;
- Information about key figures and the crypto instruments used.
Fit and proper assessment.
All key persons (directors, beneficiaries, controlling positions) are subject to a background check for integrity, qualifications, and criminal record, especially for financial crimes. Inaccurate information is grounds for refusal.
Requirements for authorized capital.
At present, the FCA does not impose any minimum share capital requirements on crypto companies.
Accounting and reporting.
The company is required to keep complete and accurate records of all transactions related to cryptocurrency activities. The documentation must be stored at the place of business and be available to supervisory authorities.
It should be noted that the regulator is constantly updating its approaches to assessing applicants, so it is recommended to seek legal assistance in order to successfully obtain a license.
Procedure for obtaining a license for crypto activities in the UK
The UK offers a strict but transparent licensing procedure for activities related to cryptocurrencies. The process includes several key steps:
Preparation for registration.
Step 1
Before applying, the applicant must study the regulatory framework and develop a complete set of internal policies and procedures. An AML/CFT officer (MLRO) with knowledge of crypto assets and FCA regulatory requirements must be appointed. It is also recommended to seek legal or compliance advice and, if necessary, arrange a preliminary meeting with the FCA.
Company registration in the UK.
Step 2
Only a company registered in the UK as a limited company can obtain a cryptocurrency license in the UK. The company must have a physical office and appointed directors.
Collection and preparation of documentation.
Step 3
At this stage, an extensive package of documents is prepared, including:
- business plan, marketing strategy, description of types of crypto activities;
- information about key shareholders, directors, and beneficiaries;
- corporate structure and description of IT systems and cybersecurity policy;
- AML/CTF policy, staff training program;
- public keys/wallets used in operations;
- internal monitoring and reporting procedures.
The FCA requires complete transparency and accuracy in the information provided.
Submission of application via FCA Connect.
Step 4
The application is submitted via the FCA Connect online system. It must clearly describe what the company will do, who its managers are, how the security of client funds will be ensured, and how AML/CTF compliance will be ensured. All documents and forms must be up to date and signed by authorized persons.
Payment of the registration fee.
Step 5
The amount depends on the company’s revenue:
- less than £250,000 (approximately $339,611) — the fee is £2,000 (approximately $2,717);
- more than £250,000 — £10,000 (approximately $13,585).
You may withdraw your application for a UK crypto license during the authorization process; however, in this case, the registration fee is non-refundable.
If your application is rejected by the Financial Conduct Authority (FCA), the reason for the rejection will be provided, and the registration fee will be refunded.
Applicants usually withdraw their applications if they are unable to provide all the necessary information or meet the deadlines.
FCA review and verification.
Step 6
The FCA appoints a responsible specialist who analyzes the application and verifies the information provided against internal databases and international sources. Additional information may be requested if necessary.
Approval and license issuance.
Step 7
If all requirements are met, the FCA issues a license to conduct crypto activities. The company has entered into the Financial Services Register, and the applicant receives an official notification with the terms of the license and a description of the permitted activities.
After receiving a license, authorized companies are required to pay periodic fees. These are calculated using a special formula that takes into account the registration fee, the company’s valuation, and the number of calendar months. The exact amount of the fee will be determined by the Financial Conduct Authority (FCA) on a case-by-case basis. In the first year of authorization, companies pay only a portion of this fee. The amount will depend on the number of months remaining in the current payment year.
Crypto regulation in the United Kingdom
The UK takes an active stance on regulating the crypto industry, seeking to ensure consumer safety while creating a favorable environment for innovation.
The main regulatory bodies in the country are:
Financial Conduct Authority (FCA) — the key financial market regulator responsible for supervising the activities of crypto companies in the context of anti-money laundering (AML) and counter-terrorist financing (CFT) requirements. The FCA also regulates firms’ conduct towards customers and market transparency.
Her Majesty’s Treasury (HMT) shapes financial policy and participates in the development of the regulatory framework for crypto assets.
Bank of England — oversees aspects related to financial stability and considers the prospect of introducing a central bank digital currency (CBDC).
In addition, the Crypto Assets Task Force, which brings together the FCA, HMT, and the Bank of England, is involved in regulation.
Legislative framework
The regulation of cryptocurrency activities in the UK is based on a combination of existing regulations and strategic initiatives aimed at adapting legislation to the rapidly evolving digital asset market. The regulatory framework is based on the 2017 Money Laundering Regulations (MLRs), which were adapted to take into account 5AMLD and 6AMLD, European Union directives adopted by the UK before Brexit.
In practice, this means that companies working with crypto assets are required to apply KYC (Know Your Customer) procedures, verify the origin of their customers’ funds, and prevent participation in transactions related to terrorist financing.
In addition to AML/CFT legislation, other regulations apply to the crypto asset sector, including the Consumer Rights Act 2015 and the Unfair Trading Regulations 2008. These documents protect the rights of individuals purchasing digital services and products, regulate the structure of contracts, and provide legal remedies in the event of consumer rights violations.
In April 2022, the UK government announced its intention to develop a new comprehensive regulatory framework for crypto assets, which resulted in the publication of a consultation paper on February 1, 2023. It proposes measures for the mandatory registration and licensing of crypto platforms, strengthening AML/CFT requirements, regulating the advertising of crypto products, and protecting user data.
An important step will be the implementation of the provisions of the discussion paper DP25/1, prepared by the FCA in collaboration with the UK Treasury. According to these plans, by 2026, crypto assets will be included in the UK’s fully regulated financial system. This means that a significant number of cryptocurrency transactions will be subject to the same rules as traditional financial instruments, including disclosure requirements, investor protection, and supervisory procedures. The increased focus on regulation is driven by the need to minimize risks to consumers, ensure financial stability, and combat financial crime and market abuse amid the growing popularity of crypto assets and related innovations.
Licensing and registration
The UK does not use the term “crypto license” in the literal sense, but requires mandatory registration with the FCA for all companies that provide cryptocurrency services. This applies to:
- cryptocurrency exchanges and trading platforms;
- crypto wallet providers;
- ICO operators and exchange platforms;
- Companies that store, transfer, or manage crypto assets on behalf of clients.
In 2025, the FCA authorization procedure will require the submission of a detailed dossier, including information on the ownership structure, sources of funding, internal control system, AML/KYC policy, and biographies of responsible persons. The FCA assesses not only a company’s compliance with legal requirements, but also the business reputation of its management.
However, the regulatory system is expected to change significantly in the coming years. As part of the government’s strategy to turn the UK into a global crypto hub, a full licensing model similar to the regulation of traditional financial institutions is planned to be introduced in 2026. This will be made possible by the development of a new regulatory regime proposed in consultation paper CP25/15.
It is expected that from 2026:
- Crypto exchanges and custodial services will be required to obtain a full FCA license to provide investment and payment services.
- There will be standardized requirements for capital, risk management, business model transparency, and customer fund protection.
- Control over advertising and marketing communications by crypto companies will also be strengthened.
Thus, the transition from simple AML registration to full licensing in 2026 will mean that crypto companies will effectively become part of the UK’s regulated financial sector.
Firms working with crypto assets should already be thinking about how to prepare for the upcoming regulatory changes. It is important to understand whether a company will need to obtain authorization under the new regime. Current processes should also be analyzed to identify gaps and determine what changes need to be implemented. Particular attention should be paid to reviewing existing systems, control mechanisms, and procedures to ensure they comply with future regulatory standards. In addition, it is important to assess and plan the necessary financial resources to ensure timely and full compliance with the new requirements. Professional lawyers from Gofaizen & Sherle can help you with this.
Register of crypto companies
In the UK, cryptocurrency companies are required to register with the FS Register, a public register maintained by the FCA. This register covers all firms and individuals authorized to conduct regulated activities, including providers of crypto services such as the exchange, storage, or transfer of digital assets. Registration in the register is a prerequisite for legal operation in the country, especially in the context of anti-money laundering (AML) requirements.
The register also records cases of unauthorized activity, such as companies operating without a license and clones imitating licensed organizations. The FCA publishes a list of warnings about such firms. Some crypto companies act as appointed representatives, providing services on behalf of an authorized partner who is responsible for them.
The FS register also contains information about individuals who perform management or operational activities in such firms, including details of appointments and disciplinary measures. Access to the data is provided through a paid subscription or a free API, making the register an important tool for transparency and consumer protection in the UK cryptocurrency services market.
Overview of the UK crypto regulation
Key requirements for conducting crypto business in the UK include:
| Project time frames | 9 to 12 months |
| State fee for filing an application | From £2,000 |
| Required share capitalRequired share capital | 0 pounds sterling |
| Corporate income tax | 19% for companies with profits below £50,000 and 25% for companies with profits above £250,000. For profits between these amounts, the tax rate may gradually increase from 19% to 25% in proportion to profits. |
| Annual supervision fee | 0 pounds sterling |
| Local employee | At least one director of the company must be a UK resident. |
| Physical office | Required |
| Accounting audit | Required |
| Sustainability | Financial Resilience and Operational Stability Required |
| Bank account options | European EMIs |
The process of setting up a company for a crypto business in the United Kingdom
Starting a crypto business in the UK begins with a mandatory and basic procedure: registering a company. The procedure is fairly quick and follows a set algorithm. The key stages of this process include:
Choosing a company name.
Step 1
The name must be unique and not identical to any already registered names. It must also comply with legal requirements.
Determining the type of company.
Step 2
The most suitable form for a crypto business is a private limited company (Ltd), as it protects the personal assets of the founders.
Appointing a director and shareholder.
Step 3
At least one director and one shareholder are required. Their full details must be provided: name, address, date of birth, and citizenship.
Choosing a legal address.
Step 4
This is the official address of the company, which will be used for correspondence. It must be located in the UK and will be displayed in the public register.
Preparation of constituent documents.
Step 5
It is necessary to draw up a memorandum and articles of association, which set out the structure and internal rules of the company.
Registration with Companies House.
Step 6
The application can be submitted online at GOV.UK or by post using form IN01. Registration usually takes one working day.
Specifying the SIC code.
Step 7
This code defines the company’s field of activity. For crypto companies, a code corresponding to financial or IT services is selected.
Opening a business account.
Step 8
After registration, it is advisable to open a corporate account to separate personal and business finances.
Once registration is complete, the company obtains legal status, and the next step is to comply with the requirements of the FCA regulator and prepare to apply for a crypto license.
Taxation for crypto companies in the United Kingdom
Although the UK does not yet have a detailed regulatory framework for cryptocurrencies, Her Majesty’s Revenue and Customs (HMRC), the UK’s tax authority, has already released a Guide to Crypto Assets, which explains all the tax obligations associated with the use of cryptocurrency under existing legislation.
Here are a few key points regarding the taxation of cryptocurrencies in the UK:
- HMRC treats cryptocurrencies as assets rather than currency. The specific tax treatment depends on cryptocurrency-related activities such as investing, mining, or trading.
- Capital Gains Tax (CGT). If you dispose of cryptocurrencies, such as selling or exchanging them for fiat currency or other assets, you may be liable to pay CGT. Taxable income is calculated based on the difference between the acquisition cost and the realization cost. An annual CGT exemption threshold applies and individuals are responsible for reporting and paying the tax.
- Income Tax (IT). If you receive cryptocurrency as payment for goods or services, it is treated as taxable income. The value of the cryptocurrency received is determined by the market value at the time of receipt.
- Cryptocurrency mining is treated as a taxable activity. The value of the cryptocurrency mined is taxable income based on its market value at the time of receipt.
- The sale and purchase of cryptocurrencies are generally exempt from value-added tax (VAT). However, other transactions, such as exchanging cryptocurrency for goods or services, may be subject to VAT.
- A deduction tax on the purchase of shares, land, or real estate may also apply in certain cases if the purchase is made using cryptocurrencies.
It is important to note that tax rules and guidance can change over time and it is recommended that you consult a Gofaizen & Sherle tax professional for the most up-to-date and accurate information on the taxation of cryptocurrencies in the UK.
Obligations for crypto business in the United Kingdom
In the UK, crypto companies are required to strictly comply with regulatory requirements established to combat money laundering, terrorist financing, and maintain the integrity of the financial sector.
The key obligations of crypto companies are:
- Registration with the FCA;
- Implementation of an internal system to monitor compliance with AML/CTF requirements;
- regular KYC checks on customers;
- appointment of a designated money laundering officer (MLRO);
- Staff training.
These measures are designed not only to prevent the illegal use of crypto assets but also to ensure the reliability and transparency of the company for customers and regulators.
Companies must also continuously monitor customer activity and assess it for compliance with the stated profile. Annual reports on financial crimes must also be prepared, and internal audit mechanisms must be in place to assess the effectiveness of the procedures adopted.
Responsibility for non-compliance
Violating the requirements or conducting crypto business without registration with the FCA in the UK can have serious consequences. Such actions are considered aiding and abetting financial crimes and disregarding consumer rights, which can lead to a ban on activities, revocation of registration, and significant fines. In some cases, criminal liability, including imprisonment, is provided for. In addition, companies may face financial penalties of up to £300 (approximately $400) per customer for failing to provide or misrepresenting mandatory information.
Conclution
Regulation of the cryptocurrency business in the UK is becoming increasingly complex and requires a deep understanding of the law. To successfully launch and operate a crypto company, it is important to take into account the rapidly changing rules and standards related to financial crimes and licensing. Competent legal support helps minimize risks and speeds up the process of obtaining the necessary permits.
Gofaizen & Sherle is ready to assist with the registration of a crypto company in the UK.
We support companies operating in the cryptocurrency and digital asset sectors — from trading platforms and fintech startups to custodial service providers. Our legal team monitors regulatory updates and assists clients in achieving full compliance with evolving UK standards.
Our services include financial crime consulting, regulatory support, and assistance with license applications. Contact us for support or to discuss any issues related to the crypto business in the UK.
FAQ about crypto license in the UK
Is cryptocurrency regulated in the UK?
Yes, cryptocurrency transactions are regulated by the UK Financial Conduct Authority (FCA). The FCA is the regulatory body responsible for supervising and controlling various financial services, including cryptocurrency businesses and transactions. The FCA’s regulatory framework aims to protect consumers, ensure market integrity, and prevent financial crimes such as money laundering and terrorist financing.
What is a crypto license in the UK?
In 2025, a crypto license in the UK is a permit to legally operate with cryptocurrencies, required for exchanges and wallet providers. As of today, it is not an official license, but stricter regulations are expected to be introduced in 2026 with new requirements for user protection and anti-money laundering. These changes will make the licensing process more rigorous and comprehensive.
What types of crypto asset activities require registration with the FCA?
These include crypto asset exchange service providers (including crypto ATMs, peer-to-peer network providers, and issuers of new crypto assets such as ICOs), as well as custodial wallet providers that store or manage crypto assets or private cryptographic keys on behalf of customers.
Can I provide crypto services while my application for registration is pending?
No, providing crypto services without approved registration is illegal. Applicants are also prohibited from using their application to promote products or services or to give the impression that the application is an endorsement by the FCA.
How do I obtain a crypto license in the UK?
Those who wish to engage in cryptocurrency activities as part of a business in the UK are required to register with the Financial Conduct Authority (FCA), but this is not formally referred to as a license.
To register a cryptocurrency business in the UK by FCA requirements, you must apply for a crypto license. Applicants must complete and submit the relevant documents and information, including a business plan, risk management policy, and key information about employees, and pay a registration fee. Once the application has been processed, the FCA will conduct an assessment and decide whether to grant a license authorizing cryptocurrency activities in the UK.
How much does a crypto license cost in the UK?
The cost of obtaining a crypto license in the UK, specifically the registration fee, depends on the annual income of the company applying for the license.
Currently, the pricing structure is as follows:
- £2,000 for companies with an annual income of less than £250,000.
- £10,000 for companies with an annual income of more than £250,000.
It is important to note that these rates are subject to change, and you are advised to contact the FCA or relevant sources for the most up-to-date information on the cost of obtaining a cryptocurrency license in the UK.
How long is a crypto license valid for in the UK?
Since there is no official licensing of cryptocurrency activities in the UK, it is technically not a license, but rather a permit, and it has no expiration date. However, it may be subject to ongoing regulatory requirements, compliance obligations, and periodic reviews by regulatory authorities such as the FCA. Failure to comply with these requirements or changes in regulatory conditions may result in the revocation or modification of the license.
What challenges might you face when getting a crypto license in the UK?
There are a few challenges you might face when getting a crypto license in the UK. First, you need to strictly follow regulatory requirements, like AML/CFT, risk management policies, and customer verification procedures, which can be a tricky and time-consuming process. Second, extensive documentation is required, including business plans, financial statements, and key information about employees, which can be a challenge for companies with limited resources. Increased scrutiny from regulators and the time required to process an application can also create challenges in the process.
Explore other Crypto Licences
Connect with our experts
Our experts will tell you how to do it as quickly and easily as possible.
By clicking the button, I confirm that I have read the privacy policy and consent to the collection and processing of my personal data in accordance with the GDPR rules.