- The UK outlined new rules for the crypto industry.
- Some say it’s burdensome.
- Incumbent fintechs like Revolut may get a competitive advantage.
The UK’s sweeping new crypto regulations may be burdensome, but incumbent fintech companies like Revolut are cheering them on.
The rules, which are said to align more with the US than the EU’s Markets in Crypto-Assets framework, are seen to be favouring companies that already operate in heavily regulated environments.
“The UK framework appears to be significantly more complex and onerous than MiCA,” Konstantinos Adamos, Group Lead Legal Counsel for Crypto at Revolut, told DL News.
“Market players that have no previous experience of operating in such a highly regulated environment will need to do a lot of work in preparation,” he said.
In other words, crypto-native companies are in for a tough time.
But, Adamos said he applauds the new legislation, in no small part because firms like Revolut tout themselves as compliance-first.
“The UK’s regime will bring certainty, clarity and create a level playing field,” Adamos said. “This is a net positive.”
Lean crypto-native startups might disagree.
The new regime subjects firms to the same burdens as investment companies — including oversight under the Senior Managers Certification Regime, the Consumer Duty, and other rigorous requirements.
That potentially raises the barrier to entry.
But the story is different for Revolut, last valued at $48 billion. The neobank has moved aggressively into crypto in recent years.
It’s launched a standalone crypto exchange app, Revolut X, expanded its crypto team by 60%, and piloted virtual cards that allow customers to pay directly with cryptocurrencies.
Revolut’s crypto buildout helped the firm post a $1.5 billion profit in 2024.
Fintechs pile in
That offensive reflects a broader trend — fintechs are cashing in on crypto.
For instance, Robinhood has built out a fast-growing crypto business and recently filed to go public in Europe. Crypto trades accounted for half the company’s transaction based revenues of $672 million in the fourth quarter, a 700% jump.
Even US banks want to get in on the action.
Crypto-native firms aren’t sitting around, however.
Kraken, the US’s second largest crypto exchange which handles about $1 billion in daily volume, has taken on Robinhood by launching commission-free stock trading for more than 11,000 US equities and exchange-traded funds.
A tougher climb
But for crypto-native companies, the UK’s new crypto rulebook presents a challenge.
Many of them were born in regulatory grey zones, optimising for speed, iteration, and borderless scale — not for satisfying UK regulators like the Financial Conduct Authority.
Now, they’ll be expected to comply with rules and regulations designed for traditional finance, which comes with broad legal expertise and deep pockets, not to mention obligations they haven’t faced before.
“Crypto-asset firms will effectively be regulated like investment firms,” said Adamos. “This means they will need to comply with a number of requirements previously unknown to them.”
Indeed, smaller players may find the cost of compliance prohibitive.
That’s something that’s happening in Europe under the MiCA framework.
According to a report from research firm Coincub, there’s been a 99% decline in European-based crypto-companies due to the bloc’s regulations, which “prioritises compliance over innovation.”
“MiCA is a mess,” Sergiu Hamza, CEO of Coincub, told DL News. The continent “is facing a job market collapse and fleeing talent. The whole ecosystem is gone.”
What’s to happen if the UK’s new regulations are even more stringent?
Regulation as a moat
In the short-term, incumbent fintechs will have an advantage, said Adamos.
That’s because Revolut already operates under banking supervision in the country, meaning they know the rules of the game beforehand.
“Considering that these companies are familiar with the regulatory rules that apply to financial institutions and have sophisticated regulatory compliance frameworks already in place,” he told DL News.
The result? A regulatory moat forming around the fintech elite, just as new market highs and renewed retail interest put crypto back in the spotlight.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
