UK Regulator Proposes Stricter Checks for Unhosted Crypto Wallets

The UK Financial Conduct Authority has launched a public consultation on new guidelines for the crypto asset sector. The document suggests that firms perform more intensive checks on transfers originating from unhosted personal wallets. The agency classifies this practice as an appropriate control measure against financial crime.

The consultation document, identified as CP26/38, will remain open for comments until December 2026. Although the suggestions are not binding, the regulator expects companies to consider these guidelines when structuring their security systems. Failure to follow the recommendations does not in itself constitute a breach of current rules.

The regulator also criticized the use of third-party technologies without proper transparency regarding risk scoring criteria. The entity questioned the application of rigid tracking rules that ignore measures proportional to the actual risk of each operation. Companies remain responsible for compliance even when they use services from external providers.

These proposals seek to align crypto asset operations with the oversight expectations already established in the British financial market. The agency stated that the changes aim to clarify existing practices without increasing operational costs or altering the products offered to consumers. The measure reflects a global effort to increase the monitoring of financial flows in digital assets.

Increased regulatory scrutiny over private wallets raises the risk perception for decentralized transactions and may pressure compliance costs for companies operating with Bitcoin and other assets in the UK.