The UK Is Building a Full Prudential Regime for Crypto Firms

The UK's Financial Conduct Authority has published CP25/42, proposing a comprehensive prudential regime for authorised cryptoasset firms. This is not incremental — it is a structural shift in how crypto businesses will be regulated in the UK.

Key proposals include permanent minimum capital requirements ranging from £75,000 to £750,000 depending on activity, K-factor capital charges tied to client order flow and trading activity, a two-tier classification of cryptoassets for position risk purposes, and a mandatory overall risk assessment framework replacing the previous ICARA process.

The regime is designed to align crypto firms with the standards applied to investment firms — covering capital adequacy, liquidity, governance, wind-down planning, and stress testing.

For firms operating in or targeting the UK market, the window to prepare is now. Licensing under the new framework will require documented controls, qualified personnel, and a compliance infrastructure that can withstand supervisory scrutiny.

COMPLaiNCE works with firms across the UK, Gibraltar, Spain, and the EU to build that infrastructure from the ground up.