TREE NEWS update: The UK Financial Conduct Authority said crypto apps that select or adjust trade routes based on price, liquidity, speed or cost may fall outside its “pure technology service” exemption. 21. The test is whether a provider materially takes part in trading decisions, not whether it uses algorithms, the FCA said. Interfaces that execute only on user instructions and preset objective rules may still qualify. The consultation closes Nov. 18 and is not yet in force; the new UK crypto regime takes effect Oct. 25, 2027.
UK FCA: Crypto Apps Routing Trades by Price, Liquidity May Need Authorization
AI take
The FCA is drawing a functional line between neutral infrastructure and discretionary trade execution, which matters for crypto apps whose value proposition rests on smart order routing. The test hinges on material influence over trading decisions rather than algorithmic automation, so interfaces that merely execute preset user rules may retain the exemption while those optimizing price or liquidity face authorization. This affects wallet and aggregator providers operating in the UK, and the long runway to the new regime gives the industry time to adapt. Whether the final guidance narrows or widens that material-participation test is the open question.
Generated by AI for reference only.
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