The UK's FCA has so far approved 27 of 100+ applications for its list of registered crypto companies that can run digital assets businesses starting in April
Context & Ripple Effects
The FCA's crypto register was always going to be a bottleneck: back in 2019 the regulator already had 87 open inquiries into crypto companies, and by this registration round more than 100 firms were competing for approval. With only 27 cleared to run digital assets businesses from April, the register effectively becomes a gate that decides which exchanges can legally operate in the UK — as Crypto.com's later registration shows, even large foreign exchanges had to wait their turn.
First-order effects
- The roughly three-quarters of applicants left unapproved cannot run digital assets businesses in the UK from April, forcing them to pause UK operations or exit while they reapply.
- The 27 approved firms gain a licensed market with most competitors locked out, at least temporarily.
Second-order effects
- The backlog proved unsustainable: within weeks the FCA extended its own approval deadline rather than let unapproved firms fall off the register, an implicit admission the vetting pace couldn't match demand.
- Approval scarcity turned registration into a competitive asset — registered firms like Crypto.com could market 'FCA-registered' status to UK users while rivals remained shut out.
Third-order effects
- The slow, restrictive gate drew years of criticism that culminated in the FCA redesigning the pipeline — faster approvals and higher acceptance rates by 2025 — before folding crypto into a bespoke regime it plans to authorize new firms under from 2026.
- The episode set the template for UK crypto regulation: legitimacy is granted by the regulator's register first, and market access follows from that list rather than from general financial rules.
The trend: UK crypto regulation is evolving from a narrow, slow approval gate into a full bespoke licensing regime, with the register's early bottlenecks shaping how the FCA now processes firms.