FCA crypto applications are open, but DeFi front-ends are still waiting for an answer

Published 3 October 2026

The FCA's application window for UK cryptoasset firms opened on 30 September 2026, as we reported in August. Two weeks before it opened, the regulator published the document that is supposed to tell firms whether they need to apply at all. For anyone running a website or app that connects users to a DeFi protocol, that document does not yet give a settled answer.

What was published

On 16 September 2026 the FCA published Policy Statement PS26/18, its final cryptoasset perimeter guidance. It adds a new chapter, PERG 18, to the FCA's Perimeter Guidance Manual. The "perimeter" is the line between activity that needs FCA authorisation and activity that does not.

The FCA's press release lists the activities that may need authorisation once the regime starts on 25 October 2027: issuing qualifying stablecoins, operating a trading platform, dealing and arranging deals, safeguarding cryptoassets, and arranging staking.

What it says about DeFi interfaces

The guidance asks the question directly. PERG 18.7.5 covers "interfaces connecting users to automated protocols" and whether they need authorisation. The answer is that it depends on whether a regulated activity is being carried on in the UK "by an identifiable person", assessed case by case.

Two other passages matter more in practice:

• Arranging is drawn widely. PERG 18.8.4 says that the ability to influence or exercise discretion over a transaction is not a necessary part of arranging deals, and neither is having control of the cryptoassets. A front-end that never holds user funds is not out of scope for that reason alone.
• Developers are treated differently from operators. The same section says that developing software is not a regulated activity as such. Where software is used to facilitate transactions, the people who would typically need authorisation are those who provide access to it, not necessarily those who wrote it.

Elsewhere the guidance says that providing information, analytics, data or dashboards is addressed separately (PERG 18.8.8), and that wrapping and bridging services are not regulated activities in themselves but may involve one, depending on how they are built.

The industry pushed back, and the FCA said its hands were tied

The feedback section of PS26/18 is unusually candid. The FCA received 78 responses to the consultation. Of the 62 that addressed intermediary activities, it reports that 63% were unsupportive of the guidance on arranging deals, and 59% thought it took too broad a view of the activity and too narrow a view of the exclusions, so that some technical service providers could end up inside the perimeter.

The FCA's response was that it "broadly" proceeded with the guidance as consulted on, because it cannot create, remove or change exclusions through guidance. Only legislation can do that.

The gap: the law is changing after the guidance was finalised

That legislation is already moving. PS26/18 says the Government has laid a new statutory instrument before Parliament that changes the scope of the arranging and dealing activities. According to the FCA's own summary, it introduces new exclusions, including one that takes "certain technical services" out of the arranging deals activity.

The FCA is explicit that its final guidance "does not yet include the new SI". It plans to consult on further changes in early Q4 2026 and aims to publish final amended guidance in early 2027.

We have not read the statutory instrument itself. Legal commentary from Travers Smith and The Industry Spread identifies the technical services exclusion as a new Article 9Z2A, covering providers that give access to an authorised firm or to a decentralised protocol. The two do not describe its conditions in quite the same way, and neither is a substitute for the text, so treat the detail as provisional.

So the timeline looks like this:

A firm that runs a DeFi interface has to decide whether to apply during a window that closes around the same time the guidance it needs is finalised. The FCA's policy overview says firms that apply after the window closes cannot rely on the transitional provisions and may need to stop the relevant activity until they are authorised.

What is not settled

• Whether a typical DeFi front-end is in or out. Under the guidance as published, it plausibly counts as arranging. Under the new exclusion, it may not. Which applies will depend on wording the FCA has not yet consulted on.
• How decentralised is decentralised enough. The FCA has said it will consult separately on DeFi guidance, including "objective indicators of decentralisation". That has not been published.
• Whether the consultation has started. We could not find it on the FCA's website at the time of writing.

What this means if you use DeFi from the UK

Nothing changes today. None of this regulates you as a user, and the regime does not start until October 2027. What may change over the next year is which front-ends remain available to UK users, since some operators may apply for authorisation, some may rely on the new exclusion, and some may block UK access instead.

Authorisation of an interface would not make the protocol behind it safe, and it would not bring compensation scheme cover for losses. The basics still apply: understand what you are signing when you set up and use a wallet, and know the common DeFi scams, which often arrive as fake versions of exactly these front-ends.

This article is general information, not legal or financial advice.

Sources

• FCA, Policy Statement PS26/18: Cryptoasset perimeter guidance, September 2026
• FCA, Crypto firms get guidance on how the new regime applies, 16 September 2026
• FCA, Overview of our cryptoassets regime policy statements
• FCA, Cryptoassets: information for firms
• Travers Smith, Nearly out of PERG-atory, 25 September 2026
• The Industry Spread, FCA PS26/18 leaves crypto front-ends waiting on Article 9Z2A