In a landmark move, the UK government published a draft of crypto legislation that would officially integrate crypto into the traditional financial system. Not everyone will be celebrating.
The new Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025 lays out an aggressive framework, formally making crypto trading platforms, stablecoin issuers, custodians, and staking providers regulated financial activities.
Companies involved will now require full authorization from the Financial Conduct Authority (FCA) — or risk operating illegally.
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At the heart of the new law is power and control. The government is positioning London as a serious player on the global crypto stage – no doubt in reaction to a shift in US government policy, but by doing so, it’s triggering major concerns around surveillance, cost barriers, and innovation stifling.
At the core of the bill are several new measures. Here’s what’s critical in the Draft:
- Crypto Exchanges must become licensed like stock exchanges.
- Stablecoin Issuers will be treated like banks and money market funds.
- Custodians will face strict safeguarding rules (especially for holding user wallets and private keys).
- Staking Providers (even decentralized staking models) must register under a special new framework.
Crucially, the legislation also extends the UK’s jurisdiction internationally. If a foreign crypto platform even indirectly offers services to a British consumer, they can now be pursued under UK law.
This “deemed in the UK” provision could radically change how global crypto businesses operate — or simply force many to block British users entirely, mirroring what’s happened in the U.S.
Meanwhile, the definition of “crypto asset” is stunningly broad, covering nearly all digital tokens except loyalty points, game assets, or non-transferable NFTs. Everything else, from Bitcoin to DeFi tokens, falls inside the net.
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New UK Crypto Bill Stirs Controversy
The UK just drafted new crypto regulation.
“If the FCA considers […] a person has acted […] contrary to the advancement of its objectives […] the FCA may publish a statement to that effect.”
The FCA just gave itself the right to publicly shame you WITHOUT TRIAL if it doesn’t… pic.twitter.com/aA8OG1JOxV
— Crypto Tips (@cryptotipsreal) April 29, 2025
The proposed new legislation contains several controversial points, which are already causing a grumble from crypto entities.
- Staking Dragnet: Even minimal staking operations could trigger full regulation, potentially kneecapping DeFi in Britain.
- Stablecoin Backing: Any fiat-referenced coin must follow heavy “backing asset” disclosure rules, which can be a potential nightmare for algorithmic and hybrid models.
- Innovation Freeze Warning: Smaller crypto startups may abandon the UK market rather than navigate a mountain of compliance hurdles.
Despite a change in political leadership with Labour replacing the Conservatives, the new government has committed to completing the previous regime’s “crypto asset regime” plans almost in full, with no new position or reconsideration.
Why It Matters: This isn’t just another boring regulatory update – it’s the start of the UK’s attempt to dominate “Regulated Crypto” globally. However, by locking the industry into the old financial rules, Britain may also accidentally smother the Web3 revolution it hopes to host.
Overall, the UK’s crypto crackdown is a double-edged sword, offering legitimacy on one hand and a regulatory chokehold on the other. Crypto firms worldwide are now on notice: adapt, comply, or leave Britain.
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The post No License, No Crypto: UK’s New Law Makes Bitcoin, Staking, and Exchanges Illegal Overnight appeared first on 99Bitcoins.
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