VASP registration in the UK is mandatory for crypto businesses targeting UK customers. Learn what the FCA requires, why applications get rejected, and how to navigate the complex compliance process.
Crypto Business Licensing UK: What You Need to Know Before Starting a Crypto Company
When you start a crypto business licensing UK, the official process for legally operating a cryptocurrency service in the United Kingdom. Also known as crypto registration with the FCA, it’s not just paperwork—it’s your shield against fines, shutdowns, or worse. The UK doesn’t ban crypto, but it doesn’t let you just set up shop either. If you’re running an exchange, wallet service, or even a DeFi platform that touches UK users, you’re required to register with the Financial Conduct Authority, the UK’s main financial regulator that oversees crypto firms. And yes, they’ve shut down dozens of unregistered platforms since 2020.
Most people think getting licensed means jumping through hoops for a stamp. It’s not. The FCA looks at your team’s experience, your anti-money laundering systems, how you protect customer funds, and whether you even know what you’re doing. Look at CoinCasso or Paycml—both claimed to be exchanges, but neither had a license. They vanished fast. Meanwhile, CoinFalcon and Swiss banks like Sygnum operate legally because they followed the rules: segregated accounts, KYC checks, and regular audits. You can’t fake your way through this. The FCA doesn’t just check your website—they dig into your bank records, your employee backgrounds, and your server logs.
There’s also a big difference between crypto regulations UK, the legal framework governing how digital assets can be traded, stored, and sold in the UK and what you see on TikTok. No, you can’t just launch an airdrop and call it a business. The FCA treats token sales like securities if they promise returns. That’s why projects like DeFiHorse or APAD airdrops are red flags—no license, no official contract, no legal footing. And if you’re targeting UK users, you’re already in their crosshairs. Even if you’re based overseas, if a UK citizen deposits money into your platform, you need to comply.
What about crypto exchanges? You can’t just pick a name and start trading. The FCA requires detailed documentation on your liquidity providers, your withdrawal limits, your cybersecurity plan, and how you handle customer complaints. Look at OPNX—they tried to trade bankruptcy claims and failed because they had no real users, no compliance, and no license. They didn’t get hacked. They got ignored. And then shut down.
The good news? The UK is one of the few places where you can build a real crypto business legally. You’re not fighting against a ban—you’re fighting against laziness. The FCA publishes clear guidance. They even have a public register of licensed firms. You can see who’s approved, who’s under review, and who’s been banned. There’s no mystery. You just have to do the work.
Below, you’ll find real case studies of crypto companies that failed because they skipped licensing, platforms that got shut down for operating without permission, and the exact steps you need to take if you’re serious about running a legal crypto business in the UK. No fluff. No hype. Just what actually matters.