UK FCA Slashes Crypto Registration Times by 69%

The data, released following a Freedom of Information request from law firm Reed Smith, paints a complex picture for the UK’s crypto ambitions. On one hand, the FCA has made remarkable strides in operational efficiency. The near-18-month wait time that characterised the 2022/23 period has been compressed to just over five months in 2024/25. This acceleration is a direct response to previous criticism that cumbersome processes were causing an exodus of cryptocurrency firms from the UK. Simon Jennings, Executive Director of the UK Cryptoasset Business Council, confirms this progress, noting that ‘the FCA itself has built up knowledge and resources internally, which naturally speeds things up.’

Yet, this positive development is shadowed by a stark decline in interest. The total number of applications received by the FCA has fallen consecutively, from 46 in 2022/23 to 28 in 2023/24 and 26 in 2024/25. More concerningly, the number of successful registrations has also dropped, from eight to just three over the same timeframe. This has resulted in the FCA’s approval rate declining from 17.4% to 11.5%, suggesting that while the process is faster, the bar for entry remains high or the quality of applications has changed.

Industry experts point to regulatory uncertainty as the primary driver behind the falling application numbers. The UK government has signalled its intention to introduce ‘robust’ new legislation for the crypto sector, leaving many firms in a holding pattern. Brett Hillis, a Partner at Reed Smith, explains the strategic hesitation: ‘Firms obtaining cryptoasset firm registration will likely need to upgrade to full FCA authorisation once that regime has been extended to cryptoassets.’ He suggests that some companies are pausing their UK plans ‘to avoid having to go through two FCA application processes, one after the other.’

This sentiment is echoed by Simon Jennings, who links the decline to a ‘lingering perception of long timelines and uncertainty.’ He adds that ‘even if things are improving under the surface, there is still a sense, particularly amongst SMEs in the market, that the process is cumbersome and tilted against them.’ The industry’s plea, as voiced by a CryptoUK spokesperson, is for a ‘full legal framework to be in place’ to provide the clarity needed for businesses to invest with confidence.

Amidst the challenges, there are positive indicators. A notably brighter spot is the sharp decline in application withdrawals, which plummeted from 70 in 2022/23 to just 15 in 2024/25. This suggests that firms who do engage with the process are finding it more manageable and are seeing it through to a conclusion. Jennings also highlights the potential impact of the FCA’s new secondary objective focusing on ‘growth and international competitiveness,’ which he says is ‘starting to filter through,’ making the system feel ‘a little less clogged than it used to.’

However, the UK cannot afford complacency. Jennings issued a stark warning about the global competitive landscape: ‘We can’t ignore the global picture: regulators from MAS [Monetary Authority of Singapore] to VARA [Dubai’s Virtual Assets Regulatory Authority] are actively courting firms, rolling out the red carpet to get them to relocate. If the UK wants to lead, we need to be alive to that competition.’ The recent FCA consultation on setting minimum standards for crypto firms is a step toward creating a ‘sustainable and competitive crypto sector,’ but the pressure is on. For the UK to solidify its position as a leading hub, the combination of regulatory speed must be matched with regulatory clarity and a proactive approach to attracting innovation.