The FCA crypto regulation framework published this month will drive out platforms unwilling to comply and draw more consumers into the market, according to Keith Grose, UK chief executive of Coinbase. Roughly 8% of UK adults, some 4.5 million people, already hold cryptocurrency, the Financial Conduct Authority (FCA) disclosed.
Grose told City AM: ‘It will wipe out people that don’t want to focus on compliance. That’s going to be a no-go now in the UK.’
What the FCA Crypto Regulation Requires
Under the new framework, crypto platforms must obtain a full financial licence (the FSMA Part 4A Permission) to serve UK clients. The deadline is 25 October 2027, when the regime comes into force, according to Sidley Austin.
Firms that miss the authorisation gateway window and submit applications after that date will not benefit from transitional arrangements and will be prohibited from conducting regulated cryptoasset activities in the UK until the FCA grants approval. Those that apply before the deadline but whose applications remain undetermined by 25 October 2027 risk being restricted to a narrow contractual run-off regime covering only pre-existing arrangements, BCLP reported.
The FCA has also extended its regulatory perimeter to cover cryptoasset lending and borrowing. Firms that lend cryptoassets to third parties, borrow from clients, or operate arrangements where clients earn a return through lending or rehypothecation will require a specific permission for those activities, according to HLC.
All authorised firms must also meet stronger resilience standards and pass capital and stress testing. A new industry-led framework to detect and prevent market manipulation, insider trading, and illicit activity sits alongside those requirements.
The FCA’s stated objective is to align crypto firms with the standards already applied to other FSMA-authorised entities, under a ‘same risk, same regulatory outcome’ principle, while adapting rules to reflect the characteristics of cryptoassets, Reed Smith noted.
Coinbase Eyes Broader UK Market as Rivals Circle
Grose said tighter oversight would help the sector build trust with consumers who remain sceptical. He pointed to access to the Financial Ombudsman Service as a concrete reassurance: ‘It…builds confidence in our overall system and security. They know I can go to the financial ombudsman if something goes wrong.’
The FCA is consulting separately on whether consumers should be able to escalate complaints about cryptoasset firms to the Financial Ombudsman Service where the firm cannot resolve them directly, Skadden reported. Further consultation on complaints handling is expected.
Coinbase has also received authorisation to offer traditional financial instruments, including equities and commodities, on its platform. Grose described the approval as a ‘stamp of approval’ that would allow Coinbase to compete directly with established providers such as AJ Bell and IG, which have themselves begun offering crypto products to retain customers.
‘You’re heading into this world where everyone is trying to compete to be the primary financial account,’ Grose said. ‘Certainly it will be more competitive.’
The expansion comes as Coinbase faces pressure elsewhere. Its stock has fallen 30.8% this year to $163, and chief executive Brian Armstrong announced plans in April to cut 14% of the global workforce to reduce costs.
Political Backdrop: Burnham and Rigby
Grose welcomed the return of Lucy Rigby as City minister, echoing the wider fintech sector’s view that she understands the role of financial technology in driving economic growth. Rigby had previously pushed to make the UK a more attractive location for fintech firms during her earlier tenure.
Prime minister Andy Burnham has not yet set out a formal position on digital assets, though Grose said his previous interactions with Coinbase’s policy team during Burnham’s time as mayor of Greater Manchester were encouraging. ‘He gets that digital assets are an important part of innovation,’ Grose said. ‘I’m not saying he’s deep in this ecosystem, but I think he is supportive.’
Grose urged both ministers to press ahead with efforts to keep fintech firms anchored in the UK rather than ceding ground to the United States. The FCA crypto regulation deadline of 25 October 2027 now sets a hard timeline for that work: firms, ministers, and regulators must all be ready before it arrives.
