The FCA closes firms that used a UK licence as an offshore badge
Serguey Asael Shinder2 min readThe FCA said on 25 September that twenty-one Contracts for Difference firms have closed since 2025 under a supervisory crackdown, with three more currently cancelling their permissions. The headline figure of twenty-four is those two groups added together, which is worth keeping straight: most of it is done, a little of it is in progress.
The conduct the FCA describes is specific. These were firms doing little actual UK business while using their authorisation as a badge - making linked overseas companies appear more trustworthy than they were, and creating the impression that a consumer was dealing with a UK-regulated firm and enjoyed UK protections when they were not. Responses ranged from restricting firms' trading abilities to requiring independent reviews of their business, with enforcement investigations opened in the two most serious cases.
Dominic Holland, the FCA's director of sell-side supervision, framed it as a boundary problem: "When firms blur the lines between their UK-regulated activities and overseas businesses, we will step in." The release closes with the standard consumer warning that CFDs are complex, highly leveraged, and capable of generating large losses quickly - and advice to check that a firm is UK authorised before opening an account.
What it means
Strip out the product and this is a case about regulatory status as a marketing asset, which is the most transferable part of it for anyone watching crypto. The value being extracted was never the permission to do business in the UK - by the FCA's account these firms barely did any. The value was the appearance of supervision, resold to customers of an affiliate that had none. A licence is cheap to maintain and expensive to obtain, and that gap is exactly what makes it attractive as a signal to borrow.
Crypto has the same structure in more places than CFDs do. An entity authorised in one jurisdiction, a group brand shared with entities authorised nowhere, and a customer who reads the brand rather than the counterparty - that is the shape of a large part of the industry's retail-facing architecture, and MiCA authorisations are now new and prestigious enough to be worth borrowing in precisely this way. The FCA's remedy is instructive too: it did not principally fine anyone. It made the licence unusable, and twenty-one firms concluded it was not worth keeping.
The number to watch is the two enforcement cases rather than the twenty-one exits. Exits resolve the immediate harm and set no precedent; a completed enforcement action would establish what the FCA must prove to call this misuse rather than ordinary group structure - and that is the finding other regulators would be able to cite.