FCA Proposes Crypto Perimeter Guidance Affecting DeFi and Web3 Interfaces

April 24, 2026

FCA Consultation on Cryptoasset Perimeter Guidance: Key Points for DeFi and Web3 User Interfaces and Wallets

Brett Carr, Stuart Davis, Cameron Jones, Gabriel Lakeman, Imaan Nazir Latham & Watkins LLP + Follow Contact LinkedIn Facebook X ;) Embed

The guidance defines certain regulated cryptoasset activities broadly, potentially placing onerous authorisation obligations on DeFi and web3 user interfaces and wallets.

On 15 April 2026, the FCA published draft perimeter guidance (in CP 26/13) that, if finalised in its current form, could bring a large segment of global web3 interface providers and wallets within scope of UK cryptoasset licensing requirements. The guidance interprets “arranging” activities broadly, meaning firms that offer users connectivity to trading functionality may need FCA authorisation.

The legislative backdrop is as follows: legislation implementing the new UK cryptoasset regulatory regime (the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026) (the Crypto Regulations) was passed by Parliament in February 2026 and will come into force on 25 October 2027. The FCA’s application period for firms wishing to undertake the new regulated cryptoasset activities will be open from 30 September 2026 to 28 February 2027. 1

The FCA is currently consulting on CP 26/13, including the meaning of activities that require a licence. The consultation is open for feedback until 3 June 2026.

Key Points From the Proposed Guidance

Under the Financial Services and Markets Act 2000 (FSMA), no person may carry on a regulated activity in the UK by way of business unless authorised or exempt; regulated activities are set out in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). CP 26/13 sets out draft guidance in a proposed new chapter of the FCA’s Perimeter Guidance Manual (PERG).

The proposed guidance is particularly impactful for web3 interface providers and wallets:

• The proposed guidance risks a large segment of global web3 interface providers and wallets (based in the UK or overseas) falling within scope of the UK licence requirement if they allow access to UK consumers.
• The compliance obligations for licensed firms are onerous — firms would be required to (i) subsidiarise in the UK, (ii) implement a full-scale compliance and financial crime framework, (iii) hold regulatory capital, and (iv) only provide access to tokens traded on UK exchanges (limiting the types of tokens that could be accessed through Decentralized Finance (DeFi)). Further, for some business models, firms may only be permitted to allow users to source liquidity from UK exchanges (effectively prohibiting access to DeFi). Firms need to consider how they will comply with the new rules, or whether they will establish measures to restrict access to UK consumers (which may include geofencing the UK market entirely).

Implications for Front-End Providers and Interfaces

A key theme of the proposed guidance is the FCA’s expansive interpretation of “arranging” activities under PERG 19.8, which could have significant implications for non-custodial wallet providers, web3 interfaces, trading software, and other front-end infrastructure that offers users connectivity to trading functionality.

Most notably, the FCA guidance provides:

“where a website hosting firm or app provider is providing users with the means by which a user can place orders, this is likely to amount to the activity of making arrangements with a view to transactions in qualifying cryptoassets. Where the firm provides users with the means to make, place or otherwise send orders and receive confirmation that a transaction has been completed, this may amount to both forms of arranging deals in qualifying cryptoassets.”

“Persons which provide the means to making trading simpler – through finding prices, venues or assisting clients in making orders on those venues, for example, through facilities which pre-fill information for the client to make the order – will likely be making arrangements with a view to transactions in qualifying cryptoassets.”

Both “making arrangements with a view to transactions in qualifying cryptoassets” and “arranging deals in qualifying cryptoassets” are regulated activities requiring authorisation under the Crypto Regulations and imposing consequent regulatory obligations (see below).

The scope of this guidance suggests that a number of front-end infrastructure providers and other cryptoasset market operators may fall within scope, and therefore represents a potentially significant consideration for firms operating in this space.

Extraterritorial Reach and Consequences of Authorisation

A firm servicing UK customers on an offshore basis will not necessarily fall out of scope of these authorisation requirements. Under Section 418(6C) of FSMA, where a person arranges deals in qualifying cryptoassets from outside the UK, the activity is deemed to be carried on in the UK if the person is involved in the sale or subscription of a qualifying cryptoasset to or by a UK “consumer” and no UK authorised intermediary (authorised for dealing as principal or operating a qualifying cryptoasset trading platform) intermediates that transaction. This means that overseas front-end providers serving UK retail users, and which fall in scope of arranging activities, will require FCA authorisation.

However, additional challenges will also apply to such firms post-authorisation. Under the FCA’s proposed rules in CP 25/40, where a firm is performing any form of arranging with respect to retail clients, it cannot deal or arrange deals in qualifying cryptoassets for a retail client unless the qualifying cryptoasset is admitted to trading on a UK cryptoasset trading platform (or will be). Firms would therefore need to ensure their arranging activities do not allow users to buy cryptoassets listed only on DeFi venues.

Furthermore, where a firm’s activity goes beyond arranging “with a view” and constitutes “executing orders or receiving and transmitting orders [(RTO)]” for a retail or elective professional client, such orders must be executed on a UK authorised execution venue (i.e., not a DeFi venue). Whilst RTO is a narrower activity than arranging (and so this restriction will not capture all arranging activity), where an interface or wallet provider has more substantive involvement in transaction execution, this additional restriction may be triggered.

Next Steps

The consultation closes on 3 June 2026 and the FCA has indicated that it will publish final guidance in September 2026. As noted above, firms wishing to undertake the new regulated cryptoasset activities can make an application with the FCA from 30 September 2026 to 28 February 2027, before the new regime commences on 25 October 2027.

1. This is for firms that wish to benefit from a saving provision that can ensure continuity of service, if, after commencement of the regime, firms are still waiting for the FCA’s determination on their application. Firms can still apply for authorisation after 28 February 2027, but they lose the protection of the saving provision and risk not having had their application determined by commencement, meaning they would have to cease new business. ;) ;) Report ### Related Posts

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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