A wide range of cryptoasset businesses and activities are set to move from a limited anti-money laundering registration regime to full financial services authorisation, marking the biggest overhaul of crypto regulation since digital assets emerged, creating new advisory opportunities for accountants.
Expected to apply from October 2027, the regime will impose new requirements across a host of activities, ranging from operating trading platforms and issuing stablecoins to dealing in cryptoassets as principal or agent and arranging deals, staking and safeguarding.
To enable organisations to transition into the new framework, the Financial Conduct Authority (FCA) is opening an authorisation gateway. Tom Crawford, senior associate at Signature Litigation, says the breadth of the regime means businesses cannot afford to delay preparations.
‘Crypto businesses will need help building out the necessary compliance frameworks, internal controls and financial reporting processes that the FCA will expect to see in place before granting authorisation – areas where accounting firms are natural advisers,’ Crawford says.
Beyond AML compliance
Most UK crypto businesses are currently supervised primarily for anti-money laundering compliance. Under the FCA’s proposed framework, cryptoassets will move closer to the regulatory model applied to traditional financial services firms.
FCA authorisation is expected to be required for activities such as operating crypto trading platforms; safeguarding cryptoassets; dealing as principal or agent; arranging crypto deals; issuing qualifying stablecoins; and carrying out certain staking-related activities.
Authorised companies will need stronger governance, capital, resilience, client asset, financial crime and market abuse controls, alongside clear monitoring of crypto exposures across holdings, payments, staking, tokenised deposits and investments.
‘It should prompt businesses to ensure cryptoassets are measured appropriately’
‘Implementing governance frameworks will become increasingly challenging,’ says Dion Seymour, crypto tax and accounting technical director at Andersen. ‘The FCA will have clear expectations, and businesses will need to establish accountability, risk management processes and oversight of their crypto activities.’
Accurate reporting
The reforms do not change UK financial reporting rules, but they are likely to raise expectations around the quality of evidence, documentation and governance supporting crypto-related accounting judgments.
‘FCA regulation is separate from accounting and tax rules, and does not determine accounting standards,’ says Seymour. ‘But it should prompt businesses to review their financial reporting and ensure cryptoasset holdings, liabilities and related revenues are recognised and measured appropriately under existing accounting standards.’
Akber Datoo, CEO and founder of legal data consultancy D2 Legal Technology, says that ‘there is no single accounting answer’ for crypto, as neither IFRS nor UK GAAP contains a comprehensive cryptoasset accounting standard.
‘The new regime does not itself rewrite the accounting treatment of cryptoassets, but it will bring much greater regulatory scrutiny to reporting and valuation questions that are already difficult,’ he says. ‘Businesses must apply existing standards by examining the asset’s actual rights, characteristics and intended use.’
Accountants will increasingly act as the bridge between code and capital
Datoo argues that accountants will increasingly have to reconcile the different identities of the same asset across legal, regulatory, accounting and tax frameworks. For instance, a token may be treated as property in law, fall within a particular FCA category, receive a different accounting classification and produce yet another tax outcome.
Valuation layer
Valuation adds another layer of difficulty. Businesses will need policies covering pricing sources, valuation cut-off, thinly traded tokens, staking and lending arrangements, forks, airdrops, stablecoin depegging, impairment and liquidity adjustments.
Ultimately, accountants will increasingly ‘act as the bridge between code and capital’, translating on-chain activity into reliable financial information and helping clients ‘understand the combined position rather than treating any one legal, regulatory or accounting label as conclusive’, Datoo says.
‘The accountant’s task is therefore not simply to record a number; it is to establish who owns and controls the asset, where the regulatory and tax nexuses arise, and whether the evidence can withstand audit,’ Datoo adds.
Prudential expectations
For many crypto firms, one of the biggest shifts will be the introduction of formal prudential expectations covering capital adequacy, liquidity, risk management and public disclosure.
Businesses will therefore need robust valuation and classification processes to determine how cryptoasset holdings are treated for regulatory capital purposes. ‘Getting those classifications wrong may have immediate consequences for how much capital a business must hold,’ says Crawford.
The FCA also expects businesses to look beyond simple price-crash scenarios. Crawford says businesses should model a wider range of stresses with appropriate accountancy expertise.
‘Prudential compliance should not be treated as a spreadsheet exercise’
This includes accounting for the possibility of market drawdowns, such as Bitcoin’s 49% drawdown since its October 2025 peak; client withdrawals, such as the run on FTX in November 2022; cyber incidents; and operational outages.
It is here that accountants will play a key role in converting prudential requirements into usable management information, which should inform actual decisions and not exist merely as documents prepared for the authorisation process.
‘This should include constructive challenge, and not just preparing the relevant calculations and numbers,’ says Datoo. ‘Prudential compliance should not be treated as a spreadsheet exercise.’
Testing should include ‘whether management assumptions are realistic, whether the underlying data is complete, whether on-chain and off-chain records reconcile, and whether stated liquidity is genuinely available under stress’, he says.
Unfamiliar areas
The FCA’s proposals also extend into areas that may be unfamiliar to many crypto businesses, including insider dealing controls, market manipulation monitoring, whistleblowing procedures and insider lists.
Crawford says the regulator will expect the usual documentation associated with authorised businesses, including evidence supporting the Consumer Duty, Threshold Conditions and Senior Managers and Certification Regime, alongside crypto-specific market abuse controls.
On top of this, crypto businesses must meet the FCA’s usual operational resilience expectations for regulated businesses. According to Crawford, together this creates a new assurance market that many crypto businesses will be encountering for the first time.
‘They will need independent, credible and documented third-party validation of their stress-testing outputs, internal capital assessments and risk-management frameworks,’ he says. ‘Exactly the kind of work accountancy firms are built to deliver.’
