[DigitalToday reporter Yoonseo Lee (이윤서)] The UK's Financial Conduct Authority (FCA) has started a formal consultation on standards for DeFi firms to counter money laundering and financial crime, as well as the scope of some exemptions in crypto regulation.

Cointelegraph, a blockchain media outlet, reported on Oct. 21 that the process is intended to set out detailed criteria for applying rules related to DeFi and stablecoins as Britain pushes to introduce a crypto regulatory framework.

In a notice released that day, the FCA began two consultation processes. One is guidance on how companies offering DeFi services should comply with rules on anti-money laundering and financial crime. The other seeks views on which entities should be excluded from crypto regulation following recent legislative changes in Britain.

The authorities appear to be focusing on clarifying the scope of existing rules rather than creating new policy. That is read as an effort to map where DeFi structures intersect with the existing financial regulatory framework and draw lines around operators' obligations.

The industry urged British authorities to improve regulatory clarity. The UK Cryptoasset Business Council rated DeFi as one of the most innovative areas in financial services. It said Britain could present clear regulatory standards and compliance requirements and establish an institutional framework so responsible innovation does not flow overseas, and stressed the FCA must complete the work properly.

The consultation also ties into Britain's new crypto regulatory framework. The draft rules are scheduled to take effect from October 2027.

Earlier, the FCA started accepting applications from Sept. 30 from crypto businesses that will be brought into the new framework. The deadline for related companies to complete registration or adjustments to meet the rules is Feb. 28, 2027. The consultation is a follow-up measure that came a few weeks after applications opened, and is leading toward specifying the scope of application for DeFi and certain crypto assets ahead of implementation.

As a result, crypto firms seeking to remain in the UK market are expected to review how DeFi service structures and stablecoin-related operating methods connect to existing anti-money laundering (AML) rules and the new crypto legal framework. In particular, the FCA is placing more weight on defining the boundaries of existing rules rather than widening regulatory loopholes, making the wording of the final guidance and the scope of recognised exemptions key variables for operators' responses.