📅 23 October 2026 • Financial Conduct Authority (UK) • FCA Consults on Financial Crime Guide Overhaul: AI, Cryptoassets, Sanctions and Proliferation Financing
Scope and status of the consultation
On 23 October 2026 the FCA opened consultation CP26/38 on updates to its Financial Crime Guide, seeking feedback until 24 December 2026. The Guide is non-binding guidance and imposes no new requirements. The proposals cover seven areas: fraud, cryptoassets, financial and trade sanctions, proliferation financing, data security, financial crime systems and controls, money laundering and terrorist financing.
Fraud, sanctions and proliferation financing
The fraud section reflects the failure to prevent fraud offence introduced by the Economic Crime and Corporate Transparency Act 2023, and strengthens expectations on fraud risk assessment, governance and management information. The sanctions and proliferation financing sections are updated for the evolved UK sanctions regime and add good and poor practice examples from supervisory work. Data security material on AI, synthetic identity fraud and digital asset risk is refreshed.
Cryptoassets, unhosted wallets and Banking as a Service
The cryptoassets section prepares firms for the new authorisation regime: from October 2027 firms carrying out certain cryptoasset activities in the UK will need to be FCA authorised under the Financial Services and Markets Act 2000 (Cryptoasset) Regulations 2026, while remaining subject to the Money Laundering Regulations, the Terrorism Act 2000 and the Proceeds of Crime Act 2002.
Draft section FCG 3.2.8 lists applying enhanced due diligence to transactions involving unhosted wallets as good practice, and draft FCG 3.2.5 calls it poor practice to use third-party technology without being able to evidence the basis of findings or scoring. The systems and controls section covers Banking as a Service delivery models, including outsourced, white labelled and embedded finance, and reinforces that regulated firms stay accountable across the delivery chain.
Separately, on 23 October 2026 the FCA announced restrictions on 6 unregulated Annex 1 lenders over anti-money laundering concerns. The restrictions were imposed at each firm's own request, in the period from 21 April to 15 October 2026. The FCA is also assessing responses to an information request sent to around 900 registered Annex 1 firms.
IMPACT
• Affected: all firms the FCA supervises for financial crime, including Annex 1 institutions and cryptoasset businesses.
• Process changes: fraud risk assessment, governance and management information, sanctions and proliferation financing controls, data security, documentation of third-party tools, accountability across Banking as a Service chains.
• Timeline: responses by 24 December 2026, final Guide text in a Policy Statement, cryptoasset authorisation regime from October 2027.
• Risk: the guidance is non-binding, but control gaps can attract supervisory attention and enforcement.
Sources:
- https://www.fca.org.uk/publications/consultation-papers/cp26-38-financial-crime-guide-updates
- https://regulationtomorrow.com/2026/10/fca-publishes-consultation-on-changes-to-its-financial-crime-guide
- https://cryptoslate.com/fca-proposes-personal-wallet-checks-in-nonbinding-crypto-guidance
- https://regmonitoring.com/updates/fca-cp26-38-financial-crime-guide-updates-ae2a75
- https://fintechfetch.com/fca-suggests-voluntary-guidelines-on-personal-wallet-checks
- https://www.fca.org.uk/news/press-releases/fca-restricts-6-firms-following-concerns-over-anti-money-laundering-controls
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