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What are the Regulations of Cryptocurrency in the UK?

Fintech Harbor Consulting | What are the Regulations of Cryptocurrency in the UK?
Reviewer: Bohdan Popovchenko
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Is cryptocurrency legal in the UK? While the country’s legislation favors crypto-related projects, it would be wrong to underestimate the importance of adhering to UK crypto laws for businesses and individuals. That’s where Fintech Harbor Consulting LTD has got you covered. Not only will you get a deeper insight into how investors should effectively handle their assets, but you will also find out more about gaining a crypto license in the United Kingdom. Onwards!

Introduction to Cryptocurrency Regulations in the UK

The UK crypto regulation recognizes such assets as property. However, when it comes to profit-gaining operations like staking, mining, and trading, any business in the market is subject to regulation and taxation.

The Financial Conduct Authority (FCA, shortly) is the country’s main regulatory body for crypto-related companies, overseeing and ensuring compliance with CTF and AML practices. Other important organizations to foster financial stability and safeguard investors include:

  • the Advertising Standards Authority (ASA);
  • the Bank of England;
  • HM Revenue and Customs (HMRC).
Fintech Harbor Consulting | What are the Regulations of Cryptocurrency in the UK?

Cryptocurrency Businesses and Regulatory Compliance

To ensure you have no issues with practically implementing the inquiry “Is crypto trading legal in the UK?”, your operation starts with the brand’s registration under the FCA roof. Whether you are interested in offering wallet solutions, crypto exchange platforms, or customer services, this step can’t be skipped. It will help you establish a top-notch reputation in the market, showcasing your robust cybersecurity and data protection measures.

Crypto Trading and Mining Laws in the UK

What regulation applies to UK-based crypto asset businesses? Here is a breakdown of the core policies to bear in mind for legal operations in the market:

  • FCA registration;
  • AML regulations;
  • tax obligations, including paying taxes on profits and reporting to the HMRC;
  • Corporation Tax and Value Added Tax (VAT) for mining businesses;
  • compliance with local eco-friendly policies for crypto mining firms;
  • compliance with the UK General Data Protection (GDPR) for data protection goals;
  • adequate risk management practices and securities regulations within the Financial Services and Markets Act (FSMA);
  • Ongoing audits and checks to promote fair and transparent operations.
Fintech Harbor Consulting | What are the Regulations of Cryptocurrency in the UK?

Taxation of Cryptocurrencies in the UK

According to the UK crypto tax laws, any format of disposing and acquiring such assets is subject to taxes — for capital gain and ordinary income. The tax-free allowance varies annually and has become twice as small during the 2024-2025 tax year compared to the previous year, namely, £3,000.

Anti-Money Laundering (AML) and Know Your Customer (KYC) Regulations

The FCA oversees any matters related to the matter of “How is crypto regulated in the UK?”. As an official company in the crypto exchange, staking, or mining, you will be obliged to provide several documents for identity proof and due diligence objectives. Your performance principles will be tailored to these principles:

  • AML — the introduction of advanced plans to assess and minimize money laundering risks through reporting, training, ongoing monitoring, and other procedures.
  • KYC — collecting and verifying documents to authorize your cooperation with end users, confirm their identities, and monitor their financial behavior via customer due diligence, dual controls, and more.
Fintech Harbor Consulting | What are the Regulations of Cryptocurrency in the UK?

Future of Cryptocurrency Regulation in the UK

The country’s legislative system is still working on its regulatory framework, so new mechanisms of operations will surely be added to current laws:

  • regulatory standards for stablecoins and DeFI;
  • Improved security, AML, and KYC policies for crypto-related and UK-based firms, etc.


With our professional assistance, crypto businesses will be able to transition from the research stage with inquiries like “Is crypto mining legal in the UK?” to practical and straightforward steps to optimizing their performance in the market.

FAQs

Your income from staking or mining is subject to Income Tax, while sales-related profits require the coverage of Capital Gains Tax and Corporation Tax. Compliance with HMRC requirements for accurate transaction record keeping is a must.

Businesses can legally operate cryptocurrency assets, but it is crucial to adhere to several regulatory practices authorized by the FCA for transparent and official performance — AML regulations, for instance.

The company’s registration with the FCA comes first. For transparent and legal performance practices, crypto asset businesses must also implement strict customer due diligence standards, adhering to CTF and AML.

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