The number of crypto exchanges that facilitate the trading of digital assets has never been higher.
From CEXs to DEXs and from dedicated apps to traditional finance platforms, blue chip assets such as BTC and ETH are now readily available.
And yet, paradoxically, the number of exchanges where you can become a registered user is actually lower than it was in years gone by. The reason for this comes down to one variable that has changed significantly over the last five years: regulation.
The era when you could sign up for virtually any exchange and begin trading instantly has given way to one in which you must choose from a narrower range of exchanges that are licensed to operate in your jurisdiction. Less choice, greater legitimacy.
With the fly-by-night and shady offshore exchanges now largely banished to the fringes, the crypto industry is defined by platforms willing to play by the rules and invest in the compliance layer this necessitates. In the UK, that compliance is poised to take the form of regulated Cryptoasset Trading Platforms, or CATPs for short.
Under the UK’s finalised cryptoasset regulatory framework, operating a cryptoasset trading platform serving UK consumers becomes a regulated activity effective October 2027, with applications for that authorisation to be submitted in a 5-month application window running from the end of September 2026 for firms wishing seamless business continuity.
The CATP permission is the permission that will dictate how UK marketed exchanges and trading venues operate on a day-to-day basis. In those four letters lie the pathway to tapping into the UK market and lawfully offering your clients exposure to digital assets, from majors to mid-caps. Understanding what it is and isn’t is key to mastering your British market entry strategy.
What is CATP?
The CATP permission defines the sorts of businesses the FCA considers to be primary trading venues and the regulatory requirements that such firms must adhere to.
Under the UK’s finalised cryptoasset framework, a Cryptoasset Trading Platform is broadly defined as an exchange that brings together multiple buyers and sellers of cryptoassets – or cryptocurrencies – enabling them to trade through systems operated by the platform.
The emphasis is on an order book system and order matching within a multilateral trading facility – the focus here is on identifying primary trading venues, while brokers and routing intermediaries fall under separate ‘dealing’ permissions.
Most current centralised exchanges are likely to fall within the CATP definition – and even decentralised ones if they operate on similar mechanics. When it comes to operating a CATP, regulators are less concerned with branding than functionality. In other words, it matters less how you describe your platform – exchange, trading venue, marketplace, broker platform, or liquidity hub – and more how you operate.
If your exchange operates systems that facilitate trading between market participants, regulators will focus on the activity being performed rather than the terminology being used. There will be no way of circumventing CATP permissions while securing a license to operate within the UK.
Why CATP regulation can’t be ignored
While the UK’s CATP crypto requirements are ostensibly about licensing, their remit extends to more than merely authorisation. The goal is actually to ensure that exchanges maintain compliance and adhere to industry best practice on an ongoing basis. CATP isn’t a box you tick to secure a crypto license: it’s an operational obligation that must be rigorously followed.
To illustrate, many crypto exchanges currently focus their compliance efforts on customer onboarding and anti-money laundering controls. While those areas remain important to UK regulators, CATP requirements shift attention towards how the market itself is operated.
This includes areas such as market surveillance, transparency, governance, and operational resilience. For example, regulators will increasingly expect platforms to demonstrate that they can identify suspicious trading behaviour. This in turn means having systems in place that are capable of detecting market abuse and unusual activity patterns.
It’s not enough to know who your customers are. If you’re operating a UK CATP, you also need to know what they’re doing.
What crypto firms should be doing now
The most successful firms aren’t waiting until 2027 to prepare – and now they don’t need to guess at draft requirements either. The FCA published its final rules for CATPs and related activities on 30 June 2026 (PS26/9, PS26/11, PS26/12 and PS26/13), so firms can assess the actual conduct, prudential and market abuse requirements now rather than mooted ones.
Zumo has published a living regulatory tracker mapping out the full UK cryptoasset regime – including the CATP permission – with direct links to the primary source documents, updated as the picture develops.
Full authorisation requirements commence on 25 October 2027, but firms already operating in the UK market should also note the savings-provision application window, open from 30 September 2026 to 28 February 2027, which allows continued operation while an authorisation application is assessed.
Crypto firms looking to get their house in order now should start by undertaking an honest assessment of their current governance model. Who’s accountable for market integrity? Who oversees conflicts of interest? How are suspicious trading patterns identified and investigated? And what happens during a major operational incident?
Just as importantly, firms should begin thinking about CATP compliance as an ongoing operating requirement rather than a one-off authorisation exercise.
Under CATP rules, crypto trading venues will be treated less like technology startups and more like financial institutions. Compliance costs will likely increase and governance expectations will undoubtedly become more demanding due to the heightened regulatory scrutiny.
Yet there is a flipside to this. Markets with stronger oversight tend to attract greater institutional participation, deeper liquidity, and broader confidence from traders.
The firms that thrive under the new regime will be those that interpret the CATP threshold not as a regulatory burden, but as the next stage in the professionalisation of the crypto industry.
