UK Cryptocurrency Regulation in 2026: FCA Rules, Tax and What Investors Need to Know

Cryptocurrency regulation in the United Kingdom has moved from piecemeal anti-money laundering rules to a comprehensive framework with real teeth. For investors, the changes matter both in terms of which platforms you can use legally, and how your activity is taxed. This guide sets out the current regulatory and tax landscape as of 2026.

FCA Registration and the Crypto Regulatory Perimeter

Mandatory registration. Since January 2020, firms carrying on UK crypto asset business — which includes exchanges, custodians, peer-to-peer platforms, and issuers in some circumstances — have been required to register with the Financial Conduct Authority under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). The registration requirement covers anti-money laundering and counter-terrorism financing obligations, not the full consumer protection and conduct framework.

The FCA maintains a public register of registered and rejected firms. Using an unregistered firm to buy or sell crypto assets is not itself illegal for consumers, but unregistered firms operate outside FSCS protection and regulatory oversight.

Financial promotions regime — from October 2023. The UK's financial promotions rules, which have long applied to traditional financial services, were extended to qualifying crypto assets from October 2023. Any communication that promotes a qualifying crypto asset to UK consumers — whether from a firm, an influencer, or a social media advertisement — must either be produced by an FCA-authorised firm or approved by an FCA-authorised firm.

This requirement has significantly constrained how crypto exchanges market to UK customers. Several large exchanges restricted UK services or adjusted their onboarding procedures in response to the promotions rules. The FCA has taken action against firms that promoted crypto assets without the required approval.

Forthcoming regulated activities framework. The UK government has committed to bringing crypto assets within the regulated activities framework under the Financial Services and Markets Act 2000 (FSMA). Secondary legislation is expected to create new regulated activities for crypto trading, custody, staking, and related services. Once this framework is in place, firms conducting these activities in or from the UK will require full FCA authorisation — not just AML registration. The timeline for full implementation extends into 2026 and 2027; the position is evolving and investors should monitor developments.

MiCA and Its UK Relevance

The EU's Markets in Crypto-Assets Regulation (MiCA) took effect in December 2024, creating a single regulatory framework for crypto assets across all EU member states. The UK is not bound by MiCA as a result of Brexit, but MiCA is relevant because:

• UK-based crypto businesses operating in the EU must comply with MiCA to access EU markets.
• The UK government has been broadly tracking the international direction of crypto regulation, and MiCA provides a reference point for the UK's own forthcoming framework.
• For investors comparing UK and EU platforms, MiCA-regulated EU platforms operate under a more uniform and, in some respects, more rigorous regime than currently applies in the UK.

LSE Crypto ETNs

In 2024, the London Stock Exchange listed the first Bitcoin and Ethereum exchange-traded notes (ETNs) for professional investors. This was a significant milestone: regulated, listed instruments referencing crypto assets, accessible through standard brokerage accounts to institutional and professional investors.

The FCA lifted its ban on retail access to crypto ETNs in October 2025. Physically backed Bitcoin and Ether ETNs listed on UK Recognised Investment Exchanges are now accessible to retail consumers, subject to cooling-off periods and risk warning requirements introduced alongside the change. This brought the UK broadly in line with the US, where spot Bitcoin ETFs were approved for retail investors in January 2024. In June 2026, the FCA proposed allowing authorised UK funds to hold up to 10% of assets in crypto ETNs, extending access further.

HMRC Taxation of Crypto Assets

HMRC does not treat crypto assets as currency. It treats them as capital assets for most purposes, meaning:

Capital Gains Tax on disposal. Every disposal of a crypto asset is a CGT event. "Disposal" includes:

• Selling crypto for fiat currency (GBP, USD, etc.).
• Exchanging one crypto asset for another (e.g., selling Bitcoin to buy Ethereum — this is a disposal of the Bitcoin at market value).
• Paying for goods or services with crypto (disposal at market value at the time of payment).
• Gifting crypto (disposal at market value, except to a spouse or civil partner where no-gain no-loss applies).

The gain or loss is calculated as proceeds minus the relevant base cost. For pooling purposes, HMRC requires the "section 104 pool" method: the average cost of all holdings of a particular token is maintained and updated with each acquisition or disposal.

Same-day and 30-day matching rules. Similar to the share identification rules for equities, HMRC applies same-day matching (disposals matched to acquisitions on the same day first) and the 30-day rule (if you sell and rebuy within 30 days, the disposal is matched against the new acquisition's cost, not the pooled cost). These rules prevent straightforward "bed and breakfasting" to crystallise losses.

Income Tax on staking and mining. Crypto received through proof-of-stake staking, mining, or as lending interest is generally treated as income in the period of receipt, with the income value equal to the market value at the date of receipt in GBP. The receipt establishes a base cost for CGT purposes on subsequent disposal.

DeFi: an evolving position. Decentralised finance activity — providing liquidity to protocols, yield farming, receiving governance tokens — sits in a regulatory grey area that HMRC has been addressing gradually. HMRC's guidance acknowledges that DeFi transactions are complex and fact-specific. The general principle is that if value is received in exchange for some form of service or benefit provided to the protocol, it is likely taxable as income. Temporary lending of crypto assets may not constitute a disposal if no change of beneficial ownership occurs, but wrapped tokens and synthetic assets create complexities. Professional advice is advisable for anyone engaged in material DeFi activity.

Airdrops. Unsolicited airdrops — where tokens are deposited into your wallet without any action on your part — are generally treated as income on receipt at market value. However, where tokens are received in exchange for some action or participation, the income characterisation is clear.

Record-Keeping Requirements

HMRC requires taxpayers to maintain detailed records of every crypto transaction, including:

• The date of the transaction.
• The description of the crypto asset.
• The number of units acquired or disposed of.
• The GBP value at the date of the transaction.
• Transaction fees paid.
• Cumulative pool quantities and costs.

Given the volume of transactions that active traders or DeFi users may execute, manual record-keeping is impractical. Dedicated crypto tax software (Koinly, CoinTracker, Recap, Accointing, and others) connects to exchanges and wallets via API and can generate HMRC-compatible CGT reports. These should still be reviewed by a qualified adviser.

Offshore Exchanges: UK Tax Still Applies

Using a non-UK exchange — Kraken, Coinbase (US), Binance, Bybit, and others — does not remove UK tax liability. UK tax residents are taxed on worldwide income and gains regardless of where the exchange is based or where the crypto is held. HMRC has information-sharing arrangements with multiple jurisdictions and is actively working with exchanges to obtain transaction data through the OECD's Crypto-Asset Reporting Framework (CARF), which is being implemented internationally.

The belief that offshore exchange activity is invisible to HMRC is not a sound assumption. Disclosure is strongly advisable for any historic non-compliance.

How Global Investments Can Help

Global Investments advises investors holding significant crypto assets as part of a broader portfolio on the tax and regulatory implications, and on how to integrate crypto holdings into an overall wealth and estate plan. We work alongside specialist crypto tax advisers to ensure records are in order and obligations are met. Contact our team to discuss your situation.