UK Plans £5B Crypto Regulation by 2027 to Shield Investors and Spur Growth
The UK Treasury is moving to bring cryptocurrency under a formal regulatory framework by 2027, which should bring oversight...
Quick overview
- The UK Treasury plans to regulate cryptocurrency by 2027, aligning it with traditional financial markets under the FCA's oversight.
- This initiative aims to address the rising risks of fraud, highlighted by a 55% increase in funds lost to crypto scams over the past year.
- The FCA will focus on ensuring company resilience, preventing financial crime, and holding senior management accountable.
- Faster crypto registration processes and clearer regulations are expected to attract investment and enhance market stability in the UK.
The UK Treasury is moving to bring cryptocurrency under a formal regulatory framework by 2027, which should bring oversight in line with that of traditional financial markets. The Financial Conduct Authority (FCA) will be taking the reins, stepping in to provide the consumer safeguards sorely missing in the largely unregulated crypto space.
This move is a response to the UK’s rapid adoption of crypto, which has also escalated the risks of fraud and investors losing money. Stats from UK Finance are pretty scary: a 55% rise in funds lost to crypto scams over the past year is a clear warning sign that we desperately need some structure and oversight.
A case last month really brought home the scale of the risks in this space. Authorities seized 61,000 BTC, valued at over £5 billion, from Chinese national Zhimin Qian, who had managed to rip off over 128,000 investors. This was the largest crypto confiscation in British history.
Getting Better Safeguards in place
Under the FCA’s watchful eye, the crypto market will at last get the tools it needs to monitor suspicious activity, enforce sanctions, and hold companies to account. And the government is betting that this will put the UK at the forefront of digital innovation.
🚨 BREAKING: UK to regulate crypto by October 2027! 🇬🇧
The government is introducing legislation Monday to extend financial regulation to crypto companies.
Key points:
• Following US approach, NOT EU’s MiCA
• “Clear rules of the road” – Chancellor Reeves
• Bank of England… pic.twitter.com/4yB9rXSrWw— Amandeep Flora| Web3 (@AmandeepWeb3) December 15, 2025
The UK Chancellor Rachel Reeves summed it up nicely when she said: “We are giving firms the certainty they need to invest, to innovate and to create high-skilled jobs; and we are at the same time giving consumers good, strong protections – and shutting the door to all the dodgy operators.
A key area of focus in the FCA’s consultation paper is on
- Making sure companies are resilient and can manage their risks
- Stopping financial crime and preventing fraud
- Making sure that senior management is held accountable
Of course, risks like volatility are always going to be there – but the City Minister, Lucy Rigby, reckons the rules will be fair, right, and encourage firms to invest in the UK while keeping consumers safe. A piece of secondary legislation is expected to come into effect on Monday, and a final rulebook should be in place by mid-2026.
Getting the rules right and attracting more investment
The FCA has also done a lot to speed up the crypto registration process, so approval timelines have now dropped to around 5 months from what was often over a year. And approval rates for crypto firms have shot up to 45% over the past few months, compared with under 15% over the past 5 years.
The government expects this combination of clear rules and faster approvals to attract new investment, make it all more transparent, and reduce the number of scams. And that will set the stage for long-term market stability. Analysts reckon this will cement the Uk’s reputation as a global leader in the adoption of digital assets.
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