UK FCA Proposes Licensing for Algorithmic Crypto Trading Path Selection

Odaily Planet Daily reports: The UK Financial Conduct Authority (FCA) has released draft guidance CP26-36, stating that crypto trading applications that select trading venues or execution routes for clients based on price, liquidity, cost, or execution speed may constitute “arranging crypto transactions” and must obtain authorization under new regulations effective October 25, 2027. Modifying trade instructions, deciding execution timing, or selecting routes based on counterparty risk and expected outcomes are indicators of “discretionary involvement”; automated decision-making does not exempt developers or operators, but interfaces that merely forward orders without affecting execution may qualify for the technical services exemption. Existing UK crypto businesses must submit applications between September 30, 2026, and February 28, 2027; the comment period ends on November 18, and the FCA aims to publish the final guidance in January 2027, as noted in the consultation document as “spring.”