Drawing the Line: Navigating the FCA's New Cryptoasset Perimeter Guidance
On 15 April 2026, the FCA published CP26/13, consulting on its proposed perimeter guidance for the new regulated cryptoasset activities introduced by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (the Cryptoasset Regulations). As we previously explained in our 7-part series covering recent UK cryptoasset developments, the Cryptoasset Regulations establish nine new regulated cryptoasset activities and the FCA has proposed a suite of rules for businesses carrying on such activities across multiple consultation papers. CP26/13 now proposes a new Chapter 19 of the Perimeter Guidance Manual (PERG) to help firms assess whether the business they carry on falls within the UK regulatory perimeter.
Overview
For cryptoasset regulated activities that are analogous to existing regulated activities, the proposed PERG 19 guidance is broadly consistent with the analogous perimeter guidance, which was as expected. However, there is a significant amount of new, crypto-specific guidance, particularly for activities that have no equivalent existing regulated activity – namely, operating a qualifying cryptoasset trading platform (QCATP), arranging qualifying cryptoasset staking and issuing qualifying stablecoins. The proposed guidance also includes clarifications on the interpretation of key definitional terms.
In this post, we set out the headline points for market participants, followed by key activity-specific guidance.
Key takeaways
Territoriality: PERG 19.3 provides activity-specific territorial guidance, which should be considered alongside the new automatic deeming provisions under section 418 FSMA. This builds on the territoriality guidance in PERG 2.4 and will be of particular relevance to overseas firms (especially given, as discussed further below, the overseas persons exclusion is not available for any cryptoasset regulated activity).
Cryptoasset lending and borrowing: although qualifying cryptoasset lending and borrowing are not standalone regulated activities, the FCA considers that they are likely to constitute other regulated cryptoasset activities. For example, disposals and redemptions of qualifying cryptoassets may constitute dealing as principal or agent in qualifying cryptoassets because “buying” and “selling” (as used in the definition of “dealing”) captures acquisitions and disposals for valuable consideration. Further, yield that is paid in qualifying cryptoassets would also constitute dealing as principal or agent. Other regulated activities, such as arranging deals in qualifying cryptoassets and safeguarding qualifying cryptoassets or specified investment cryptoassets, may also be engaged by qualifying cryptoasset lending and borrowing.
Terminology: as a general point (and as we would expect), the FCA makes clear that labels and terminology are not determinative of the outcome. Terms like "exchange", "custody", "wallet", "broker" and "platform" do not map onto statutory concepts so the key question when considering particular activities is what a firm does in practice. CP26/13 also clarifies the FCA’s interpretation of certain key definitions:
"Qualifying cryptoasset" excludes cryptoassets that are solely a record of value or contractual rights. The FCA proposed guidance provides that the sort of consideration that indicates that a cryptoasset is not solely a record includes: (i) it is traded as the object of exchange in markets; (ii) market participants rely on it as the authoritative basis for taking commercial risk; or (iii) transferring control of it is the mechanism by which value is transferred. Factors which indicate that a cryptoasset is solely a record include there being no observable price or pricing mechanism, or there being no expectation among holders of the cryptoasset that it can be used to generate value.
The concept of “transferability” referred to in the definition of "qualifying cryptoasset" is to be interpreted broadly; it is not confined to technical ability to move a token on a ledger, and even off-chain assignment of rights would suffice. Being capable of being traded on a cryptoasset market is one indicator, but even the absence of this capability does not mean that the cryptoasset is necessarily not transferable. In practice, it seems likely that the FCA expects that the transferability hurdle will be low and that the vast majority of cryptoassets will satisfy this limb.
“UK consumer”, as defined in section 418 FSMA when considering whether activities are carried on “in the UK” is confirmed to be distinct from the client categories used in the FCA Handbook. The FCA guidance provides that the same individual may be a “consumer” for the purposes of a firm’s territoriality assessment and a professional client under the client categorisation rules. The section 418 concept of “consumer” is only intended to be applied in the context of statutory territoriality assessments.
Exclusions: as a general point, the FCA notes that not all tradfi exclusions have been replicated for cryptoasset activities. Notably, the FCA reiterates the position in the Cryptoasset Regulations that the overseas person exclusion (OPE) does not apply to any regulated cryptoasset activities. What the lack of OPE means is that overseas persons will need to consider carefully (i) whether their activities are within the scope of the new cryptoasset regulated activities and (ii) if so, whether those activities are really being carried on “in the UK” (and in particular taking into account the expanded tests in section 418 of FSMA). The guidance in PERG 19.3 on territoriality (and the guidance elsewhere in PERG 19 on the regulated activities) is therefore likely to be subject to particularly close review by non-UK businesses.
Investment managers: The existing regulated activities of managing investments and advising on specified investments have not been expanded to capture qualifying cryptoassets. Both activities, however, remain regulated when carried on in respect of specified investment cryptoassets (e.g. tokenised shares or bonds).
Guidance by activity
Below, we have prepared a summary table of the key guidance contained in CP26/13 for each of the new regulated cryptoasset activities.
Activity | Key takeaways |
Operating a QCATP | Four conditions: the following conditions must be satisfied for a system to be QCATP: (i) rule-based trading system; (ii) multiple third-party buying and selling interests interact within the system; (iii) results in a contract; and (iv) the contract is for exchange of qualifying cryptoassets for money, e-money or other qualifying cryptoassets. Multiple parties interacting: to satisfy this condition, at the point of entry the system must enable one person to interact potentially with multiple third parties other than the operator (although the PERG guidance notes that operators will be permitted to execute trades on a matched principal basis on its trading platform). Results in a contract: where there is no trade execution brought about by the system, the system will not, in the FCA’s view, amount to a qualifying cryptoasset trading platform (QCATP). The example used here is a bulletin board used for advertising buying and selling interests. Exchange: the PERG guidance currently provides that the contracts arising must be for the exchange of qualifying cryptoassets for money (including e-money) or other qualifying cryptoassets. As such, financial instruments such as cryptoasset derivatives and cryptoasset exchange-traded notes cannot be traded on a QCATP; they must instead be traded on a (traditional) trading venue, and separate trading venue authorisation may be required. The FCA guidance in CP26/13 provides that whilst a firm may operate both a QCATP and a trading venue in the UK, it cannot offer the instruments traded on a UK QCATP on a trading venue (and vice versa). Additional permissions: QCATP operators would likely also need separate permissions for safeguarding (if they offer a wallet for pre/post-trade safeguarding) and dealing as principal (if engaging in matched principal trading). |
Dealing in qualifying cryptoassets as principal / agent | Similar to existing dealing guidance: the proposed guidance for the new cryptoasset dealing activities is broadly analogous to existing PERG provisions on dealing in specified investments as principal or agent, with adaptations as required – e.g., to account for crypto-specific RAO exclusions. Holding out exclusion: this exclusion only applies to dealing as principal and the FCA sets out some potentially helpful guidance on what this means in practice. For example, “holding out” includes but is not limited to statements a person makes by means of advertisements or otherwise, as well as a person’s conduct, and the mere fact that an individual is a user of a QCATP does not mean that an individual is holding themselves out as such. |
Arranging deals in qualifying cryptoassets / Making arrangements with a view to transactions in qualifying cryptoassets | Similar to the existing arranging guidance: the FCA’s proposed guidance includes some similar language to the guidance on the current regulated activities of arranging and making arrangements (with cross-references back to PERG 2.7). Some types of business could be captured by both arranging activities: the guidance uses a website hosting firm or app provider as an example, which demonstrates some of the complexity. If the firm or provider provides users with the means to place orders, that is likely to constitute the making arrangements activity. If the same firm or provider provides users with the means to make, place or otherwise send orders and receive confirmation that a transaction has been completed, this could amount to both forms of arranging. Illustrative examples of in-scope services: the draft guidance indicates that arranging may capture (i) other trading platforms not captured as QCATPs; (ii) providing access to QCATPs or dealers; and (iii) facilitating qualifying cryptoasset lending / borrowing. Illustrative examples of out-of-scope services: the draft guidance indicates that the following situations should not be caught by either of the arranging activities: (i) providing software to authorised persons for peripheral matters to their regulated activities; (ii) back-office administration where this is concerned with the aftermath of the transaction (rather than with a view to the transaction); and (iii) passive display of literature (although the financial promotions regime should be considered). Technical services exclusion: there is no exclusion for arranging activities for “technical services” (unlike staking). Mere communication exclusion: only available where the person “merely” (as used in Article 9Z2 of the Cryptoasset Regulations) provides the means of communication. However, the FCA’s view is that any added value (formatted screens, audit trails, order matching, price-finding, venue selection, pre-filled order forms) goes beyond “merely” providing the means of communication and indicates the exclusion is unlikely to be available. |
Safeguarding / arranging for safeguarding of qualifying cryptoassets (and relevant specified investment cryptoassets) | Beneficial ownership: unlike the tradfi equivalent, the FCA guidance indicates that there is no requirement that beneficial ownership is held to carry on this activity. As such, there will be less emphasis on establishing ownership and more on “control”. Control test: the key test in a crypto-context is “control”, which has a broad definition capturing the ability (“through any means”) to bring about a transfer. Holding the means of access or part of it (e.g. shards of private keys) would suffice. Self-custody: providing customers with a solution to self-custody is expected to be out of scope, as long as the firm has no means to bring about a transfer of the benefit. If the firm promises not to exercise control but still has it (e.g., because it can override the client’s authorities or devise a way to do that), the control elements are likely to be met. Holding out exclusion: the FCA gives a few examples where it envisages that this exclusion would apply. A safety deposit box provider or a generic data storage provider may, in the ordinary course of business, have the requisite degree of control to be safeguarding cryptoassets on behalf of a customer, but if they do not hold themselves out as engaging in the business of providing a service in relation to cryptoassets, they would be able to rely on this exclusion. Territoriality: there is some interesting commentary on the FCA’s view as to when cryptoasset safeguarding is considered to be carried on “in the UK”. In the FCA’s view, this is assumed to be the location of the safeguarding operations and this focusses on where the requisite degree of control to bring about a transfer of the benefit of the cryptoasset is being or could be exercised. As such, if the mechanisms and protections around that control are situated in the UK, the FCA guidance indicates that the safeguarding activity would be seen as being carried on in the UK – regardless of the location of the customer or of the cryptoasset. This would also need to be considered in the context of the expanded definition in section 418 of FSMA (which will cover overseas persons carrying on safeguarding with UK consumers). |
Arranging qualifying cryptoasset staking | Solo staking: providing clients with software to stake their own cryptoassets without any further involvement or input, would not be in scope of the arranging staking activity. Liquid staking: the provision of a liquid staking token in exchange for a staked qualifying cryptoasset ("liquid staking") is more likely to be considered dealing in qualifying cryptoassets rather than arranging staking. Where the same person also arranges the underlying staking, even if unrelated to the provision of liquid staking tokens, permission to carry on arranging staking would also be required. Technical services exclusion: firms merely providing technical services (e.g. validator nodes) can rely on this exclusion if they do not hold themselves out as offering to arrange staking to the public. However, providing any added value (dashboards, compounding, recommendations, validator selection) indicates the exclusion is unlikely to be available. The FCA indicates that providing added value (e.g., a dashboard providing easy access to staked assets and rewards) would likely mean that the exclusion is not satisfied. |
Issuing qualifying stablecoins | Single-issuer principle: the FCA guidance provides that the issuance activity contemplates a single issuer for the regulated activity of issuance. If A arranges for B to carry out all three limbs of the issuance activity, only A (not B) is the issuer. Where only some limbs are carried on by B, the FCA explains that “persons should consider the arrangements as a whole to determine who is carrying on the issuing activity”. Ancillary service providers: firms only providing technology, infrastructure or minting capabilities to issuers are generally not issuers themselves, including under white-labelling arrangements (where that firm’s role is limited to technical provision). However, the FCA notes such firms should also consider whether they are carrying on any other regulated activity. Acquisition of UK stablecoin business: the FCA’s guidance indicates that an overseas firm purchasing a UK issued qualifying stablecoin business is likely to require authorisation under article 9M. |
Next steps
The consultation closes on 3 June 2026. While the proposed PERG 19 guidance remains in draft form, it provides welcome clarity for firms assessing which, if any, new permissions will be required once the new regime is implemented in October 2027. The application window opens on 30 September 2026 and closes on 28 February 2027.
Without materially departing from existing perimeter guidance on similar activities, CP26/13 provides helpful guidance as to how the FCA is thinking about perimeter issues (even noting that this is subject to consultation). This should be essential reading for any firm conducting a regulatory perimeter analysis for cryptoasset activities they carry on with a potential UK nexus.
