Crypto Licence in the UK

Cryptocurrency Licence in the UKThe UK regulatory framework for crypto assets is partially aligned with the EU, as the country adopted the AML/CFT requirements laid out in the EU 5th Anti-Money Laundering Directive (5AMLD) and the 6th Anti-Money Laundering Directive (6AMLD) prior to leaving the organisation. However, the UK’s national legislation is at an infancy stage, as the government has only recently announced its plans to build an infrastructure that should turn the country into a global hub for crypto technologies and investment.

UK crypto licence


All companies planning to carry out crypto asset activities in the UK must register with the Financial Conduct Authority (FCA) in order to obtain a crypto licence in the UK).

The FCA is a supervising authority who enforces already existing AML/CFT regulations as well as spearheads a dialogue among the regulatory bodies and market participants. One of such initiatives is a two-day collaborative event CryptoSprint where, in essence, regulators meet with the innovators to discuss and partner on crypto policy developments.

The FCA makes a decision on complete applications within 6 months. If an application is incomplete, the decision is made within 12 months.

The department of Innovative Pathways can support the application process by  explaining the complexities of the regulations, including the implications for crypto asset business models.

The most important factor in the acquisition and sale of cryptocurrency here is the ban on the use of crypto-vaktivki to finance operations of illegal circulation of funds. To open a crypto business in the country, you should not just follow the rules of AML/CFT, but also create, and put into operation the mechanism of implementation of the AML/CFT policy within the company.

The regulator keeps under control all parties involved in the acquisition and sale of cryptocurrency in the state through the procedure «Know your client» (KYC). In addition, the Due Diligence (CDD) procedures identify risks and provide measures to eliminate identified risks. Such activities are aimed at combating money-laundering and the financing of illegal manipulation in the cryptocurrency business. The UK cryptocurrency license gives  the ability to provide different functions for the company properly.

Types of crypto licences in the UK:

1)   Crypto Asset exchange provider

This category includes a company or one practitioner that provides one or a set of listed services in the course of doing business:

  • Exchange or organization of exchange of cryptocurrencies for fiat money or vice versa
  • Exchange or organization of exchange of one cryptocurrency to another
  • Control of equipment that performs automatic processes for cryptocurrency exchange on fiat funds or other cryptocurrency (including crypto-ATM, activities of P2P cryptocurrency exchange platforms)

2)   Custodian Wallet Providers

Company or practitioner providing storage and administration services:

  • Cryptocurrencies on behalf of their own clients
  • Private encrypted keys for the storage and transfer of cryptocurrency in the process of providing the service above

Key requirements for becoming an authorised crypto business in the UK:

  • Registered company with a physical office (PO box isn’t allowed)
  • Bank accounts for operations and cryptocurrency transactions
  • Compliance with the AML requirements
  • Preparation of all required documents for obtaining a crypto licence (such as business plan, risk management policies according to AML/CFT legislation)


  • An applicant settles an application fee
    • 2,000 GBP (if the company’s income is less than 250,000 GBP)
    • 10,000 GBP (if the company’s income is greater than 250,000 GBP)
  • An applicant submits a completed application form via Connect
  • The FCA assigns a case officer and starts assessing the application
  • The applicant provides any additional information or evidence as per the case officer’s request
  • The FCA checks the application against various databases and information held by other regulatory agencies in the UK or overseas
  • The FCA assesses the crypto business, considering whether it meets the minimum threshold conditions (which depend on the complexity of the business) described in the Handbook
  • The FCA makes a decision on the application and issues a Part 4A Permission if the application is successful
  • The FCA confirms the decision in writing, including a Scope of Permission which states what type of regulated activities are authorised, start date and limitations of the permission
  • Upon authorisation, the Financial Services Register will be updated automatically

Required documents:

  • Documentation about the directors and owners, including proof of their relevant experience, competences (e.g. CV) and impeccable reputation
  • Information about the shareholders
  • Business plan (including financial model, marketing plan, organisational structure)
  • Documentation of risk management procedures and policies relating to AML/CFT and all company’s departments that could be potentially exposed to security or integrity risks

Overall, the aim of the documentation is to ensure that an applicant complies with the AML/CFT legislation and will be able to successfully operate in the market.

An application can be withdrawn during the authorisation process, in which case the application fee isn’t refunded. The applicants usually pull out when they’re unable to provide all the required information or due to missed legal deadlines.

If an application is rejected, the FCA will explain the reason for their decision and will refund the application fee. It’s possible to resubmit the application.

In addition to the authorisation application fee, authorised companies also have to pay a periodic fee which is calculated by applying a particular formula (involving application fee, company’s evaluation and calendar months) and communicated by the FCA in each individual case. In the first year, authorised companies have to pay only a proportion of the fee (based on the number of months remaining in the fee-year).

Starting a company in the UK

Before applying for a crypto licence in the UK, it’s mandatory to register a company in the UK. One of the most popular business structures in the UK is a Private Limited Company (Ltd). The advantages include protection of personal assets, tax planning and reductions and even enhanced professional image. A new company can be set up from abroad.

There are no requirements for a minimum share capital. A prerequisite for establishing a Private Limited Company in the UK is at least one shareholder and one director, who can be the same person and a non-resident of the UK.

Steps of opening a Private Limited Company:

  • Choosing a unique name that should include either Limited or Ltd
  • Choosing directors and a secretary
  • Choosing either shareholders or guarantors
  • Identifying people with significant control over the company (e.g. voting rights)
  • Preparing a memorandum of association and articles of association
  • Identifying the scope of company and accounting record keeping
  • Registering a company with Companies House (including registering an official address and obtaining a SIC code)
  • Registering a company with HMRC for Corporation Tax
  • Submitting an application for the FCA AML/CFT crypto asset authorisation


The company must be registered in the UK.

The enterprise must have an office on the territory of the state.

The licensee must maintain and maintain records at the place of business or registered office of all transactions concerning any payments made by the licensee.

The applicant must hire a local director and an anti-money laundering officer. The candidate must verify that the board of directors has sufficient experience to manage the business, taking into account the educational qualifications and professional certification of the persons appointed to the leading positions.

There are no minimum capital requirements.

Eternity Law International has carefully analysed key features of the regulation of the cryptocurrency sphere operating within the United Kingdom.


While the government is yet to build an effective and comprehensive regulatory framework for crypto assets, crypto-related tax liabilities are already laid out in the Cryptoassets Manual, published in March 2021 by the UK tax authority Her Majesty’s Revenue and Customs (HMRC) in accordance with existing legislation. The manual describes in detail what records crypto businesses and individuals should keep and what taxes they might be subject to.

The content of this manual is based on the policy papers, titled Cryptoassets: Tax for Individuals and Crypto Assets: Tax for Businesses, which were published in December 2018 and November 2019 respectively.

If a company is conducting activities involving exchange tokens, it’s subject to paying taxes. Such activities include:

  • Trading exchange tokens
  • Exchanging tokens for other assets (including other types of crypto assets)
  • Crypto mining
  • Providing products or services in return for exchange tokens

It’s important to note that the tax treatment of crypto assets is contingent upon the fast evolving crypto industry and is therefore subject to improvements or change. Partially due to this reason, when it comes to paying taxes, every case is evaluated individually.

Types of taxes crypto businesses might be liable to pay:

  • Corporation Tax (CT) – 19%
  • Digital Services Tax (DST) – 2%
  • National Insurance Contributions – rates vary depending on employee’s earnings
  • VAT – 20%

More information regarding taxation here.



88,900 EUR
  •  Preparation of business plan, company management structure and other financial documents
  • Company formation in the UK
  • Application for authorization with the FCA
  • Correspondence with the Case Officer appointed by the FCA and final decision on the share capital requirements
  • Appointment of the necessary staff
  • Bank account opening

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