UK Cryptocurrency Regulation Act ETC short-term trading takes effect

UK ETC short-term trading officially takes effect: full registration system opens, industry reshuffle accelerates (July 28, 2025)

1. Core requirements of the new regulations

Mandatory registration: All ETC short-term trading exchanges and custodians operating in the UK must complete the registration of the UK Financial Conduct Authority (FCA), otherwise the service must be stopped.

Compliance threshold:

Anti-money laundering (AML): It is necessary to prove the ability to monitor on-chain transactions (such as Elliptic and Chainalysis systems).

Customer asset isolation: It is prohibited to mix user funds with platform operating funds.

Information disclosure: Submit reserve proof and transaction data to the FCA regularly.

2. Current compliance progress

Approved platforms (26):

Compliant exchanges: Revolut, Kraken, eToro

Custodians: Copper, Zodia (under Standard Chartered Bank)

Temporary licenses (38): Including OKX, Bybit, etc., need to supplement materials within the 3-month transition period.

Exit the UK market (12): Binance, KuCoin and others have stopped their UK business due to non-compliance.

3. Impact on the market

① User side

Improved fund security: Compliance platforms need to purchase insurance (such as LedgerX's 250 million pounds insurance).

Trading restrictions: Accounts that have not completed KYC are prohibited from depositing and withdrawing fiat currency, and the leverage limit is reduced to 2 times (originally 5-10 times).

② Enterprise side

Increased costs: Small and medium-sized platforms' compliance expenses exceed 500,000 pounds/year, or accelerated mergers and acquisitions (such as Gemini's acquisition of Bitstamp's UK business).

Competitive landscape: Traditional financial institutions (such as HSBC and Barclays) took the opportunity to launch compliant encryption services.

③ Industry trends

DeFi regulation extension: FCA may next regulate the front-end interface of DEX (such as Uniswap).

Stablecoin priority: USDT and USDC need to apply for electronic currency licenses (EMI) separately.

4. Global Regulatory Comparison

Region Regulatory Agency Core Requirements Progress

EU MiCA unified licensing system (implemented in July 2025) has approved 21 stablecoin issuers

US SEC/CFTC securities attribute identification (such as Coinbase lawsuit) Compliance disputes continue

Hong Kong SFC mandatory licensing (effective on August 1) Only HashKey and OSL are licensed

5. Investment advice

Short-term risk aversion: withdraw assets from non-compliant platforms and transfer them to FCA registered exchanges.

Long-term layout: focus on compliance leaders (such as Kraken) and traditional financial institutions' crypto businesses (such as Standard Chartered Zodia).

Regulatory arbitrage: Some platforms may turn to offshore (such as Dubai and Singapore), but be wary of legal risks.

Outlook: The UK's move may become a regulatory model for G7 countries. In the next 12 months, the global crypto market will enter the "licensed operation" era, and the industry concentration will increase significantly.