On 15 April 2026, the FCA published draft perimeter guidance in CP 26/13 that, if finalised in its current form, could bring a substantial portion of global web3 interface providers and wallets within scope of UK cryptoasset licensing requirements.
Legislative Background
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (the Crypto Regulations), which implement the new UK cryptoasset regulatory regime, were passed by Parliament in February 2026 and will come into force on 25 October 2027.
The FCA's application window for firms planning to undertake the new regulated cryptoasset activities runs from 30 September 2026 to 28 February 2027. Firms that apply within this window benefit from a saving provision ensuring continuity of service whilst their application remains pending at commencement of the regime whereas firms applying after 28 February 2027 lose this protection and risk having to cease business if their application has not been determined by the time the regime commences.
Key Points from the Proposed Guidance
Under the Financial Services and Markets Act 2000 (FSMA), no person may carry on a regulated activity in the UK by way of business unless authorised or exempt. CP 26/13 sets out guidance in a proposed new chapter of the FCA's Perimeter Guidance Manual (PERG) and is particularly significant for web3 interface providers and wallets:
- The proposed guidance risks bringing a large segment of global web3 interface providers and wallets; whether based in the UK or overseas within scope of the UK licence requirement if they allow access to UK consumers.
- Firms would be required to subsidiarise in the UK, implement a full-scale compliance and financial crime framework, hold regulatory capital and restrict user access to tokens admitted to trading on UK exchanges. For certain business models, firms may only be permitted to allow users to source liquidity from UK exchanges, effectively prohibiting access to decentralised finance (DeFi) venues.
Implications for Front-End Providers and Interfaces
A central theme of the proposed guidance is the FCA's expansive interpretation of "arranging" activities under PERG 19.8. This has significant implications for non-custodial wallet providers, web3 interfaces, trading software and other front-end infrastructure that offers users connectivity to trading functionality.
The FCA guidance states:
"where a website hosting firm or app provider is providing users with the means by which a user can place orders, this is likely to amount to the activity of making arrangements with a view to transactions in qualifying cryptoassets. Where the firm provides users with the means to make, place or otherwise send orders and receive confirmation that a transaction has been completed, this may amount to both forms of arranging deals in qualifying cryptoassets."
"Persons which provide the means to making trading simpler – through finding prices, venues or assisting clients in making orders on those venues, for example, through facilities which pre-fill information for the client to make the order – will likely be making arrangements with a view to transactions in qualifying cryptoassets."
Both "making arrangements with a view to transactions in qualifying cryptoassets" and "arranging deals in qualifying cryptoassets" are regulated activities under the Crypto Regulations, carrying consequent regulatory obligations.
Extraterritorial Reach and Authorisation Consequences
Offshore operation does not necessarily place a firm outside the scope of these requirements. Under section 418(6C) of FSMA, where a person arranges deals in qualifying cryptoassets from outside the UK, the activity is treated as carried on in the UK if the person is involved in the sale or subscription of a qualifying cryptoasset to or by a UK consumer and no UK authorised intermediary intermediates the transaction. Overseas front-end providers serving UK retail users that fall within the scope of arranging activities will therefore require FCA authorisation.
Under the FCA's proposed rules in CP 25/40, where a firm performs any form of arranging in relation to retail clients, it cannot deal or arrange deals in qualifying cryptoassets for a retail client unless the relevant cryptoasset is admitted to trading on a UK cryptoasset trading platform. Firms would need to ensure their arranging activities do not facilitate user access to cryptoassets listed only on DeFi venues.
Where a firm's involvement goes beyond arranging "with a view" and constitutes executing orders or receiving and transmitting orders (RTO) for a retail or elective professional client, those orders must be executed on a UK authorised execution venue. Whilst RTO is a narrower activity than arranging and will not capture all arranging activity, interface and wallet providers with more substantive involvement in transaction execution should consider whether this additional restriction applies to their model.
Next Steps
The consultation closes on 3 June 2026, with final guidance expected in September 2026. Firms wishing to benefit from the saving provision should ensure they submit their applications to the FCA between 30 September 2026 and 28 February 2027, ahead of the regime's commencement on 25 October 2027.
Firms should therefore consider how they will comply with the new rules and whether they will implement measures to restrict access to UK consumers, which may include geofencing the UK market.
About LawBEAM
LawBEAM's leading crypto team has extensive experience helping firms navigate complex legal and regulatory change. We represent UK and international crypto firms and advise on legal and regulatory strategy that positions our clients for success in international markets. Please contact our team to discuss how we can support your legal and regulatory needs.
