The UK Treasury has unveiled a draft consultation introducing significantly tougher regulatory requirements for crypto-asset firms operating within the country. Central to the proposal is a stricter anti-money laundering (AML) framework, coupled with a major change in ownership disclosure rules.
Currently, firms are required to notify regulators when a shareholder holds 25% or more of the business. The draft lowers this threshold to 10%, a shift that policymakers argue will enhance transparency around beneficial ownership and reduce risks of illicit financial activity.
Alongside ownership rules, the consultation expands "fit and proper" tests for senior managers and raises expectations around transaction reporting. Companies in the digital asset sector would face more rigorous standards in screening executives, ensuring their qualifications and backgrounds meet higher compliance criteria.
The Treasury has opened the draft for public consultation until September 30, 2025. Following this period, the government is expected to finalize the rules and submit them to Parliament in early 2026. The initiative builds on previous government announcements, including a commitment to regulate cryptoassets under the Financial Services and Markets Act (FSMA).
Industry reaction has been mixed. Some crypto businesses warn that the new compliance obligations may raise costs, particularly for smaller firms. Others welcome the move, arguing that stronger rules will provide clarity and confidence for institutional investors considering exposure to digital assets.
