FCA Outlines DeFi Regulatory Boundaries Ahead of UK’s New Crypto Rules

The FCA published two key regulatory consultations on Wednesday to define the treatment of decentralised finance (DeFi) and delimit the perimeter of the UK’s new cryptoasset regime. Through publications GC26/7 and CP26/36 , the British watchdog clarifies how authorised firms must handle operational risks, compliance, and financial crime prevention when interacting with decentralised protocols , while establishing specific carve-outs for purely technical services and transient settlements. This initiative sets a critical benchmark for both fintech and institutional players by extending consumer protection and resilience standards from traditional finance into automated, decentralised environments. Beyond providing legal certainty for technology infrastructure providers, the framework aims to prevent inadvertent breaches before the overarching authorisation regime formally takes effect in October 2027.

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