Coinbase warns UK crypto rules could become a de facto DeFi ban

22 Oct 2026

22 Oct 2026, 15:02 UTC+02:00

The UK’s upcoming crypto rulebook could quietly cut regulated platforms off from decentralized finance, according to Katie Harries, head of policy for Europe at Coinbase. In an opinion piece published by Cointelegraph on 22 October, she argues that the Financial Conduct Authority’s (FCA) approach risks becoming “a de facto ban” on regulated firms offering DeFi access to UK customers.

What the FCA rules would require

From 25 October 2027, firms offering crypto services to UK customers will need FCA authorization. Under the proposed rules, regulated platforms would have to ensure customer orders are only executed on an FCA-authorized venue. The aim is to stop overseas firms from serving the UK market illegally.

The problem, Harries says, is that decentralized protocols and exchanges have no person behind them who could apply for authorization. No rule explicitly forbids DeFi integrations, but the FCA has said it will not write DeFi-specific rules and will instead apply the same rules used for centralized trading. The FCA is currently consulting on guidance about how its rules apply to firms whose services use or interact with DeFi.

How the EU and US compare

Harries points to a different direction elsewhere. In the European Union, the European Securities and Markets Authority has proposed allowing regulated firms to provide access to DeFi. In the United States, the Securities and Exchange Commission granted an “Innovation Exemption” in September for peer-to-peer trading of tokenized stocks using automated trading systems and liquidity pools.

She also notes the UK government has pledged that it wants the country to “lead the world on digital assets,” and argues that goal is hard to reach if British firms are cut off from the infrastructure digital asset markets run on.

The case for regulating the gateway

The piece accepts there are real risks. A customer on a familiar regulated app may not realize they have moved into an environment without the usual protections, some firms could use DeFi integrations to sidestep obligations, and DeFi can raise financial crime and market resilience concerns.

Harries’ answer is clear disclosures and firm responsibilities rather than exclusion. Regulated platforms, she argues, could warn users when they leave a regulated environment, require consent, curate which protocols are offered, and report incidents and usage to regulators. She compares this to multi-asset “super apps” the FCA already permits, as long as users are told which protections apply to each product. A ban, in her view, would not remove DeFi but would push activity further from the regulator’s view.

It is worth keeping in mind that this is an opinion piece from a policy lead at Coinbase, an exchange with a direct commercial interest in offering DeFi access, not an FCA decision.

What it means for traders

• Nothing changes yet: the authorization regime starts in October 2027 and DeFi guidance is still under consultation, so current access through UK-facing apps is not affected today.
• Possible feature gaps later: if the FCA keeps its approach, UK users of regulated platforms may lose in-app DeFi features such as onchain swaps, while EU users could keep them if the ESMA proposal goes ahead.
• Know your protections: whatever happens, check whether a product sits inside or outside regulatory protection before you use it. Our testing methodology explains how we assess licensing and safety.
• Choosing a platform: see how regulated exchanges such as Coinbase and Kraken compare, or browse our exchange comparison.

What to watch next

Watch for the outcome of the FCA’s DeFi guidance consultation, any final ESMA position on regulated DeFi access in the EU, and whether other UK-facing exchanges push back publicly before the 2027 start date.

Related reviews

• Coinbase review
• Kraken review
• Bingx review

Sources

• Cointelegraph: The UK needs a workable route to regulated DeFi access

News is for information only and is not financial advice. More crypto news