The UK Financial Conduct Authority (FCA) has launched a public consultation on new non-Handbook regulatory guidance aimed at firms using decentralised finance (DeFi) technology. Published under consultation paper GC26/7, the guidelines focus specifically on strengthening operational resilience and combating financial crime across digital financial services.
Addressing Operational Risks in Automated Platforms
Decentralised finance relies heavily on automated smart contracts and distributed ledger infrastructure. According to the FCA guidance consultation GC26/7, while these technologies offer new operational efficiencies, they also introduce distinct risks regarding system stability, market integrity, and consumer protection. The proposed framework sets out practical measures for regulated entities to monitor automated systems and mitigate technology failures.
Financial Crime and AML Compliance
The consultation highlights the requirement for businesses interacting with decentralised protocols to maintain full compliance with the UK Money Laundering Regulations (MLRs). The regulator emphasised that operating without traditional intermediaries does not exempt financial service providers from establishing robust anti-money laundering controls, customer due diligence protocols, and transaction monitoring mechanisms.
Implementation Timeline and Regulatory Perimeter
The FCA is inviting feedback on the proposed guidance until 18 November 2026, with final guidance expected to be published in January 2027. This initiative forms part of the broader regulatory transition leading up to 25 October 2027, when the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 officially expand the UK regulatory perimeter to cover comprehensive cryptoasset business activities. Readers interested in broader UK market regulatory developments can also read our coverage on the Finance Chiefs Warn Treasury Over Crypto Delay story.
Be First to Comment