Key Takeaways
- The UK’s crypto regulations are still in the process of being implemented, but most banks are blocking customer access to registered crypto exchanges.
- The Financial Conduct Authority (FCA) has a list of 59 certified crypto asset companies, including exchanges like Coinbase and Gemini.
- A report by the UK Cryptoasset Business Council found that 70% of exchanges described the banking environment as more hostile than 12 months ago, with 80% reporting an increase in customers experiencing blocks or limits to bank transfers.
- The FCA is consulting on new rules to be implemented by October 2027, but banks are not budging, with many placing limits or fully blocking transfers to crypto exchange accounts.
Introduction to the UK’s Crypto Regulations
The United Kingdom’s crypto regulations are still in the process of being implemented, but the country’s banks are already taking a cautious approach. Despite the Financial Conduct Authority’s (FCA) list of certified crypto asset companies, which includes exchanges like Coinbase and Gemini, most banks are blocking their customers’ access to these platforms. This is causing frustration among crypto exchanges, which are finding it challenging to operate in the UK due to the restrictive banking environment.
The FCA’s List of Certified Crypto Asset Companies
The FCA’s list of certified crypto asset companies now numbers 59, including some of the biggest names in the industry. These companies have met the UK’s anti-money laundering and terrorism financing regulations, and are therefore considered to be compliant with the country’s financial rules. However, despite this certification, many banks are still refusing to allow their customers to transfer funds to these exchanges. This is causing problems for both the exchanges and their customers, who are finding it difficult to access the crypto market.
The Hostile Banking Environment
A report by the UK Cryptoasset Business Council found that 70% of exchanges described the banking environment as more hostile than 12 months ago. This is reflected in the fact that 80% of exchanges reported an increase in customers experiencing blocks or limits to bank transfers. The report also found that 40% of transactions were blocked or delayed, which is causing significant problems for the crypto industry. The exchanges are finding it challenging to operate in this environment, and some are even prioritizing other markets due to the difficulties they are facing in the UK.
The FCA’s Consultation on New Rules
The FCA is currently consulting on new rules to be implemented by October 2027, which is expected to provide clarity on the regulation of cryptocurrency in the UK. The road to formal regulation of cryptocurrency in the UK became clearer at the end of 2025, with legislation from the Treasury that extended existing financial rules to cover the industry. However, despite this progress, the banks are not budging, and many are still placing limits or fully blocking transfers to crypto exchange accounts. This is causing frustration among crypto exchanges, which are finding it challenging to operate in the UK due to the restrictive banking environment.
The Banks’ Response
The banks are justifying their stance by saying that they are protecting their customers from the high risk of digital assets. Starling Bank, for example, has blocked all transfers to crypto exchange accounts, citing the high risk of fraud and economic crime. Other banks, such as HSBC, Barclays, and NatWest, are placing limits on how much customers can transfer to their crypto exchange accounts. The banks are saying that they have a duty to protect their customers and make risk-based decisions about possible fraud, scams, and economic crime threats.
The Crypto Exchanges’ Response
The crypto exchanges are finding it challenging to operate in this environment, and some are even prioritizing other markets due to the difficulties they are facing in the UK. One crypto exchange observed nearly $1.4 billion in declined transactions in 2025 due to bank-side rejections. The exchanges are saying that if they are registered with the FCA, it should not be this challenging for UK businesses to operate in the country. They are calling for more clarity and consistency in the regulation of cryptocurrency, and are hoping that the FCA’s consultation on new rules will provide some relief.
Conclusion
The UK’s crypto regulations are still in the process of being implemented, but the country’s banks are already taking a cautious approach. The restrictive banking environment is causing problems for both the crypto exchanges and their customers, who are finding it difficult to access the crypto market. The FCA’s consultation on new rules is expected to provide clarity on the regulation of cryptocurrency in the UK, but it remains to be seen whether the banks will change their stance. The crypto exchanges are calling for more clarity and consistency in the regulation of cryptocurrency, and are hoping that the FCA’s consultation on new rules will provide some relief.
