United Kingdom Financial Conduct Authority Expands Pre-Application Support Service (PASS) for Cryptoasset, Payment, and Wholesale Firms
On 8 April 2025, the United Kingdom Financial Conduct Authority (UK FCA) launched its Pre-Application Support Service (PASS) to enhance regulatory engagement and streamline application processes for firms in the cryptoasset, payments, and wholesale financial sectors. The updated service is designed to reduce regulatory friction, improve application quality, and support timely market entry for businesses driving innovation across these key financial segments.
- PASS offers free, pre-application meetings to firms planning to apply for authorisation or registration in the United Kingdom within the cryptoasset, payment, or wholesale sectors.
- Participating firms meet directly with a UK FCA case officer who explains regulatory expectations, discusses common pitfalls, and provides access to essential preparatory materials.
- The same case officer may oversee the formal application assessment, ensuring consistency and a deeper understanding of the applicant’s business model.
- Firms must request meetings via the UK FCA’s Connect platform, submitting key information such as business model details, corporate structure, profiles of key personnel, and guidance needs.
- The UK FCA actively engages with industry stakeholders including legal advisers, trade associations, and fintech networks through speaker sessions and collaborative outreach.
- Requests for speaker engagements can be submitted through email or the FCA’s speaker request form, facilitating broader dissemination of regulatory insights.
- The UK FCA provides sector-specific guidance: cryptoasset firms are directed to registration procedures under the Money Laundering Regulations; payment firms receive structured pathways for authorisation or registration depending on their classification.
- Wholesale firms, including fund managers, benchmark administrators, and multilateral trading facilities, are provided with dedicated regulatory preparation resources.
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United Kingdom Financial Conduct Authority Strengthens AML/CTF Registration Requirements for Cryptoasset Firms
On 17 April 2025, the United Kingdom Financial Conduct Authority (UK FCA) introduced enhanced anti-money laundering and counter-terrorist financing (AML/CTF) registration requirements for cryptoasset firms operating in the United Kingdom. The revised framework strengthens the regulatory regime under the Money Laundering Regulations 2017 (MLRs), aligning financial crime controls with broader consumer protection objectives and reiterating the UK FCA’s supervisory authority over cryptoasset businesses.
- All firms providing cryptoasset services within the United Kingdom under the scope of the MLRs must be formally registered with the UK FCA prior to commencing operations.
- Entities conducting business “by way of business” must assess their status under Regulations 8, 9, and 14A of the MLRs, including firms already authorised under United Kingdom Financial Services and Markets Act 2000 (FSMA) or other financial regimes.
- Cryptoasset firms wishing to issue or promote financial communications in the UK must be registered under the MLRs to ensure alignment with the Financial Promotions Regime.
- Registration applications must be submitted via the UK FCA’s Connect platform, accompanied by complete documentation meeting the UK FCA’s quality and information standards.
- The UK FCA has emphasised that incomplete, poor-quality, or misleading applications will be rejected without initiating the statutory three-month decision window.
- Firms are encouraged to request pre-application meetings to discuss the registration process, business model clarity, and regulatory expectations; however, these meetings are not to be treated as indicative approvals.
- To schedule a pre-application meeting, applicants must submit detailed business information, regulatory queries, and a summary of intended cryptoasset activities in advance.
- Registration fees fall under Category 6 of the UK FCA’s pricing structure, with annual or periodic charges applicable based on the gross income derived from cryptoasset operations.
- Fit and proper assessments apply to all key personnel and stakeholders, including directors, AML compliance officers, managers, and beneficial owners, under Regulation 58A of the MLRs.
- Evaluation criteria include criminal history, financial integrity, competence, compliance track record, and the firm’s exposure to financial crime risks.
- Non-disclosure or misrepresentation of facts in the application process may result in automatic rejection and criminal prosecution.
- Registered applicants must evidence operational readiness and a proactive compliance culture capable of meeting ongoing AML/CTF obligations.
- For queries and clarifications, firms are directed to the UK FCA’s dedicated contact channel at firm.queries@fca.org.uk.
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US CFTC’s Kristin N. Johnson Champions Responsible Innovation and Global AI Collaboration at Africa Fintech Summit 2025
On 24 April 2025, Commissioner Kristin N. Johnson of the United States Commodity Futures Trading Commission (US CFTC) delivered a speech at the Africa Fintech Summit 2025 in Washington, D.C., urging global collaboration on artificial intelligence (AI), digital asset regulation, and inclusive financial innovation. Emphasising Africa’s emerging leadership in fintech, she highlighted the continent’s potential to reshape global finance through partnerships, technology deployment, and regulatory cooperation.
- Commissioner Johnson affirmed the US CFTC’s expanding mandate over fintech, blockchain, and AI, aligning with signals from Congress and US courts.
- She praised African fintech leaders such as PalmPay, Flutterwave, Kuda, MTN, Piggvest, and Yoco as global champions of inclusive finance.
- The Commissioner cited personal observations from visits to South Africa, Kenya, Zambia, and Ghana, commending local innovation, ambition, and adoption of global technology platforms.
- AI was identified as a key force in transforming medical diagnostics, agriculture, and financial systems, with financial services firms using it for trading, compliance, and fraud detection.
- Johnson noted rising barriers to AI access for emerging markets, including infrastructure costs and computational needs, advocating initiatives like Cassava Technologies and Nvidia’s AI factory in South Africa.
- She underscored the need for a regulatory framework rooted in principles such as explainability, bias control, data governance, and transparency in AI use.
- Commissioner Johnson reiterated her call to establish an AI Fraud Task Force and boost interagency regulatory coordination to address risks in AI-powered financial services.
- Reference was made to global efforts by the Financial Stability Board and IOSCO, as well as Singapore’s sandbox models, to responsibly integrate AI into fintech.
- She warned that fragmented global standards could increase compliance burdens for innovators in emerging economies and called for harmonisation.
- Kenya’s M-Pesa was cited as a proven model of scalable, mobile-first financial inclusion, with Johnson highlighting her engagement with M-Pesa leadership and Kenya’s central bank.
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United Kingdom Financial Conduct Authority Signals Pro-Innovation Regulatory Commitment at The City UK International Conference 2025
On 24 April 2025, Jessica Rusu, Chief Data, Information and Intelligence Officer of the United Kingdom Financial Conduct Authority (UK FCA), addressed The City UK International Conference, declaring the UK FCA’s full-spectrum commitment to financial innovation, AI, and digital asset regulation. Amid global financial uncertainty, she positioned the United Kingdom as a stable, rule-of-law-driven financial hub where proportionate regulation empowers fintech and market-scale acceleration.
- Rusu introduced the UK FCA’s new five-year strategy focused on deepening market trust, enhancing risk management, and fostering sustainable growth through innovation.
- She underscored the UK’s leadership in fintech, highlighting its superior startup density, a robust unicorn and soonicorn pipeline, and global standing in insurance, derivatives, debt, and FX markets.
- The FCA’s world-first Regulatory Sandbox and Digital Sandbox — now equipped with an AI Lab — were cited as central to its innovation agenda, offering synthetic data and safe testing environments.
- Metrics revealed that over 90% of firms engaging with the FCA’s Innovation Services proceed to authorisation, with Sandbox participants 50% more likely to raise capital and attracting 15% more investment than peers.
- Rusu reaffirmed the FCA’s regulatory advances in crypto markets, referencing its domestic crypto roadmap, use of FSMA 2000, and consumer protection measures including the removal of over 900 scam crypto sites and issuance of 1,700 alerts under the financial promotions regime.
- She confirmed the UK FCA’s active role in global forums including IOSCO, FATF, and the Financial Stability Board, to align domestic regulation with evolving international standards for digital assets.
- On Open Banking and Open Finance, Rusu noted over 11 million UK users and efforts to extend services to new models like variable recurring payments, citing ‘Project Aperta’ as a BIS collaboration on cross-border data frameworks.
- The UK FCA’s AI Lab was promoted as the launchpad for GenAI testing in finance, with findings from a joint FCA–Bank of England survey showing 75% of firms have already deployed AI solutions.
- She emphasised that the existing UK regulatory framework — including the Consumer Duty and SM&CR — is agile enough to address emerging AI risks.
- Wholesale market reform is under way through PISCES, a private securities platform, alongside significant streamlining of listing, capital markets, and prospectus regulation.
- The UK FCA’s digitisation push includes the ‘My FCA’ portal, machine-readable rules, simplified authorisation forms, and an AI-enhanced supervisory hub for real-time guidance.
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US SEC Commissioner Uyeda Urges Clarity and Competition for Crypto Asset Custody Solutions at US Crypto Roundtable
On 25 April 2025, United States Securities and Exchange Commission (US SEC) Commissioner Mark T. Uyeda addressed the Crypto Task Force Roundtable, in her speech, urging regulatory clarity and enhanced competition in the custody of crypto assets. Highlighting the recent withdrawal of Staff Accounting Bulletin No. 121 as a positive step, Commissioner Uyeda called for broadening the range of qualified custodians, recognising state-chartered trust companies, and reforming outdated interpretations that stifle digital asset investment strategies.
- Commissioner Uyeda welcomed the withdrawal of Staff Accounting Bulletin No. 121, viewing it as a removal of barriers impeding crypto custodial services.
- He called for recognising state-chartered limited purpose trust companies as qualified custodians, aligning federal policy with state-level fiduciary authorisations.
- Outdated interpretations of the Custody Rule were criticised for wrongly classifying all crypto assets as securities or funds, limiting adviser flexibility and innovation.
- Commissioner Uyeda advocated interim guidance and eventual rulemaking to reform the special purpose broker-dealer regime, enabling custody of both securities and non-securities crypto assets.
- He joined Commissioner Hester M. Peirce in emphasising that most crypto assets should not be blanketly treated as securities, urging a facts-and-circumstances based classification.
- The Commissioner argued that state and federally chartered fiduciary institutions should both be allowed to serve as qualified custodians under consistent standards.
- Uyeda called for the US SEC to clarify whether crypto assets constitute “funds” under the Custody Rule to eliminate uncertainty harming investment strategies.
- Expanding custodial options would stimulate competition, foster innovation, and offer improved services for crypto investors within a regulated framework.
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Evolving Crypto Custody Regulations in United States: US SEC Commissioner Caroline A. Crenshaw Warns Against Eroding Investor Protections
On 25 April 2025, United States Securities and Exchange Commission (US SEC) Commissioner Caroline A. Crenshaw addressed the Crypto Task Force Roundtable with a speech, where she discussed the diluting regulatory protections in the name of innovation, stating that investor safeguards must remain non-negotiable, she rejected proposals for a separate or weakened custody regime for crypto assets and instead called for stricter standards grounded in historical precedent, legal rigour, and operational transparency.
- Commissioner Crenshaw rejected the idea of bifurcating custody regulations for crypto assets, insisting on maintaining the full force of the Custody Rule (17 C.F.R. § 275.206(4)-2).
- She cautioned against allowing blockchain-specific features like smart contracts and omnibus wallets to justify exemptions from regulatory safeguards.
- Examples from major financial frauds — such as the Madoff and Stanford scandals — were cited to demonstrate the catastrophic consequences of failed custodial oversight.
- Crenshaw underscored the systemic risk of shared (omnibus) wallets and called for real-time transparency and strict segregation of customer assets.
- She warned that self-custody models for investment advisers, if not subjected to full compliance with the Custody Rule, could facilitate theft, fraud, and systemic failure.
- The Commissioner drew on the 1960s–70s paperwork crisis and the transition to electronic securities to show that regulation must evolve in step with technology, not retreat from it.
- She highlighted the lack of crypto-specific protections under the United States Securities Investor Protection Act, calling it a structural vulnerability yet to be addressed.
- Reference was made to the enforcement action in SEC v. Galois Capital (2024) as a recent illustration of crypto custody risk and the US SEC’s willingness to act.
- Regulatory proposals are expected to include stricter third-party asset verification, surprise examinations, and enhanced operational safeguards for digital custodians.
- Crypto custodians will likely face expanded fiduciary disclosure duties, including detailed risk reporting on asset control mechanisms and insolvency gaps.
- Centralised crypto exchanges with integrated brokerage functions may be mandated to end omnibus pooling and ensure full asset segregation.
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United States Securities and Exchange Commission Commissioner Hester M. Peirce Calls for Practical, Innovation-Friendly Crypto Custody Framework at Crypto Task Force Roundtable
On 25 April 2025, United States Securities and Exchange Commission (US SEC) Commissioner Hester M. Peirce delivered a statement at the Crypto Task Force Roundtable on custody oof crypto assets and discussing the absence of clear regulatory guidelines on crypto custody and urging the US SEC to establish a functional and innovation-oriented framework. Drawing a metaphorical comparison to a “lava game,” she warned that the current regulatory opacity forces legitimate actors into unsafe territory, suppresses innovation, and benefits unregulated markets. Commissioner Peirce called for rules that enable safe custody — including self-custody and smart contract-based systems — and align with the realities of blockchain technology rather than resist them.
- Commissioner Peirce denounced the lack of crypto custody regulations as a major risk, arguing it deters brokers, advisers, and funds from entering the market.
- She called on the United States Securities and Exchange Commission to build “walkways over the lava” by offering clear legal routes for both intermediated and self-custodied digital assets.
- The speech advocated explicit recognition of self-custody as a legitimate and potentially safer model, especially for blockchain-native assets.
- Commissioner Peirce proposed that the current Special Purpose Broker-Dealer framework and Rule 15c3-3 be revised to accommodate digital asset realities and blockchain-based custody solutions.
- She emphasised the need to adapt legal and regulatory frameworks to account for smart contracts, distributed ledgers, and programmable financial instruments like tokenized securities.
- Ten direct questions were posed regarding urgent reforms in laws such as the Securities Investor Protection Act (SIPA), Uniform Commercial Code, and custody-related SEC rules.
- Broker-dealers will require bespoke regulatory guidance for holding and transacting in tokenised securities and crypto assets via smart contracts.
- The evolution of qualified custodians may include blockchain-native entities, provided the regulatory approach shifts from rigid classification to principle-based qualification.
- Funds and investment advisers may be permitted to hold crypto assets under new fiduciary safeguards tailored for self-custody.
- Commissioner Peirce cautioned that continued regulatory inertia could drive innovation offshore or into non-compliant channels, jeopardising investor protection and domestic market leadership.
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US SEC Announces Crypto Roundtable Titled Tokenization: Moving Assets Onchain – Where TradFi and DeFi Meet
The United States Securities and Exchange Commission’s Crypto Task Force will host a roundtable titled “Tokenization: Moving Assets Onchain – Where TradFi and DeFi Meet,” scheduled from 1:00PM to 5:00PM ET, on 12 May 2025. This session marks the latest in the Commission’s ongoing efforts to explore regulatory strategies for crypto assets, focusing on how tokenisation is bridging the gap between traditional financial institutions and decentralised finance infrastructure.
- The roundtable will examine the use of tokenisation to represent and settle traditional financial assets on blockchain networks.
- Major institutions such as JPMorgan, BlackRock, and Citi are actively piloting tokenised forms of bonds, funds, and real-world assets.
- The event signals the US SEC’s acknowledgment of tokenisation as a structural shift in global asset movement and settlement.
- In-person registration for the event is open, while the webcast will be freely accessible without registration.
- The roundtable is framed as a convergence of traditional finance (TradFi) and decentralised finance (DeFi), reflecting the Commission’s intent to mediate emerging regulatory and operational intersections.
- Interested participants may write to crypto@sec.gov with “Potential Panelist” as the subject line for consideration.
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