U.S.-based DeFi group urges UK FCA to anchor crypto rules to 'unilateral control'

Policy Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email U.S.-based DeFi group urges UK FCA to anchor crypto rules to 'unilateral control' DeFi Education Fund says developers of non-custodial protocols should not be regulated as intermediaries under the U.K.’s proposed crypto regime. By Jamie Crawley , AI Boost | Edited by Jesse Hamilton Feb 13, 2026, 3:19 p.m. Make us preferred on Google UK FCA (FCA, modified by CoinDesk) What to know : The DeFi Education Fund tells FCA that regulatory obligations should apply only where there is “unilateral control” over user assets or transactions. The U.S.-based group argues non-custodial DeFi developers should not be treated like centralized intermediaries. DEF warns that applying trading platform and prudential requirements and full money-laundering laws to automated protocols would be structurally incompatible. The DeFi Education Fund (DEF) has urged the U.K.’s Financial Conduct Authority to adopt a narrow, functional definition of “control” as it finalizes new rules for crypto asset activities. The Washington, D.C.-based advocacy group argued that regulatory obligations should hinge on whether an entity has unilateral authority over user funds or transactions, not merely whether it developed or contributed to a decentralized protocol, in a response to an FCA consultation paper shared exclusively with CoinDesk. STORY CONTINUES BELOW Don't miss another story. Subscribe to the State of Crypto Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . “Control should be the determinative factor” of regulatory scope, DEF said, warning that software developers could otherwise be swept into intermediary-style obligations despite lacking custody or transactional authority. The submission focuses on an area of the consultation which considers how decentralized finance (DeFi) arrangements should be treated under the U.K.’s emerging crypto regime. DEF supports the FCA’s control-based approach in principle but says it must be tied to concrete operational powers, such as the ability to initiate or block transactions, modify protocol parameters or exclude users. DEF is an organization focused on informing policymakers and regulators about the benefits of DeFi and has been one of the prominent lobby groups on the road to crypto regulatory frameworks being established in Washington in recent years. The group also challenged the FCA’s framing of DeFi-specific risks, arguing that cybersecurity vulnerabilities are not unique to blockchain systems and that public blockchains offer transparency advantages in combating illicit finance. Applying prudential, reporting and platform access requirements designed for centralized trading platforms to non-custodial, automated protocols would be “ill-suited,” DEF said. The FCA is seeking to bring a broad range of crypto activities within its regulatory perimeter as the U.K. moves toward a comprehensive digital asset framework . Read More: UK regulators start major consultation on crypto listings, DeFi, and staking FCA DeFi Education Fund DeFi AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Accelerating Convergence Between Traditional and On-Chain Finance in 2026? 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