FCA Crypto Change in Control: Shareholders, Beneficial Owners and Ownership Assessments

By CRYPTOVERSE Legal Consultancy

A crypto company has agreed its next funding round. The investor will acquire a minority stake, nominate a director and receive consent rights over important business decisions.

The founders expect to complete within three weeks.

Then their advisers ask: “Have you assessed whether the investor—or anyone above it in the ownership chain—will become a controller?”

The founders had checked the share percentage. They had not examined voting arrangements, investor rights or the fund’s ownership structure.

An investment in a regulated crypto business can require regulatory assessment before completion. The analysis extends beyond the percentage shown on the cap table: the firm’s regulatory status, ownership chain, voting power and influence all matter.

Start with the firm’s regulatory status

If you need a crypto UK License before calculating thresholds, identify the legal entity and the regime governing it.

Distinguish between:

• A cryptoasset business registered under the Money Laundering Regulations—MLRs.
• A firm authorised under Part 4A of FSMA.
• An applicant awaiting authorisation.
• An overseas authorised firm operating through a UK branch.
• A group company that does not itself hold the relevant status.

These positions should not be treated as interchangeable.

The FCA’s change-in-control guidance distinguishes acquisitions involving UK-authorised firms from overseas firms. Section 178 of FSMA concerns UK-authorised firms; overseas firms have separate notification obligations under SUP 11.4.4R.

Prepare the status analysis before agreeing a completion timetable.

MLR registration has its own ownership assessment

The FCA’s guidance records changes to the registered cryptoasset regime effective from 30 June 2026 for overseas crypto company for UK FCA Authorisation.

Where there is a beneficial owner within the meaning of MLR regulations 5 and 6, beneficial-owner thresholds and the regulation 58A assessment apply. Where there is no such beneficial owner in the controller chain, the guidance directs firms to Directive-firm thresholds, FSMA forms and Part XII assessment criteria.

This makes an important practical difference: an acquisition of a registered crypto business should not be assessed solely by applying a generic FSMA checklist.

Document:

1. The target’s regulatory status.
2. Whether the ownership structure contains relevant beneficial owners.
3. The applicable thresholds and assessment route.
4. The persons requiring identification and submissions.
5. The implications for transaction timing.

A controller is not necessarily the largest shareholder

The FCA’s controller guidance addresses shares, voting power, holdings in parent undertakings and significant influence. It also identifies voting arrangements involving parties acting in concert.

A useful ownership review examines:

• Direct and indirect holdings.
• Different share classes.
• Voting agreements.
• Board appointment rights.
• Reserved matters.
• Nominee arrangements.
• Relationships between investors.
• Rights held through parent companies.

For our hypothetical funding round, the investor’s share percentage is the beginning of the assessment. Its governance rights and ownership chain need review alongside that number.

Avoid applying one threshold to every crypto company

The FCA publishes different thresholds for different categories of firm.

For example, its guidance distinguishes Directive-firm bands from the single 20% band generally applicable to specified non-Directive firms. It separately addresses beneficial-owner thresholds for registered cryptoasset businesses. Significant influence also requires consideration.

The correct approach is to establish the firm’s category and applicable provisions before calculating the transaction’s effect.

Prepare a threshold memorandum recording:

A percentage copied from another transaction can produce the wrong conclusion.

Look beyond share transfers

Ownership changes can arise through several mechanisms for corporate structuring of VAPS.

Suggested review triggers include:

• New share issues.
• Secondary purchases.
• Convertible instruments.
• Share buybacks.
• Changes to voting rights.
• Investor agreements.
• Group reorganisations.
• Changes in an upstream holding company.

The FCA notes that a decision not to act can sometimes increase a person’s control above a relevant threshold.

For example, a buyback may change an existing investor’s percentage without that investor purchasing additional shares.

Review the actual legal mechanism and sequence. Identify when relevant rights arise, rather than assuming control changes only when money reaches the company.

Prepare the ownership chain before requesting forms

For regulatory compliance advisory a cap table showing direct shareholders is useful but may leave important questions unanswered.

Prepare charts before and after the transaction, supported by relevant corporate records and agreements.

For complex structures, investigate:

• Intermediate holding companies.
• Funds and their management arrangements.
• General partners and investment vehicles.
• Trusts and trustees.
• Nominees and underlying arrangements.
• Persons with voting or decision-making rights.

The FCA expects proposed controllers to be identified and detailed ownership charts to explain relevant close links and regulated entities.

Avoid assuming that multiplying ownership percentages through every level resolves the statutory analysis. Explain the chain and apply the relevant legal tests.

Build an evidence pack that explains the investor

A well-prepared submission should help the regulator understand who is acquiring control, how the acquisition is funded and what it means for the business.

The FCA’s submission guidance addresses funding evidence, business-model risks, conflicts and criminal background checks, alongside ownership information.

A suggested preparation pack includes:

Tailor the pack to the applicable forms and assessment route. Do not present this suggested list as universally exhaustive.

Disclosures should be accurate and consistent. Explain adverse matters with relevant context and supporting records.

Put regulatory requirements into the transaction timetable

For acquisitions requiring approval, the FCA expects notification and approval before the change occurs.

Its published FSMA assessment period is up to 60 working days from a complete notification, excluding relevant interruption periods.

That is not a promise that a transaction will complete within 60 calendar days of the first submission.

Transaction planning should address:

• Regulatory conditions precedent.
• Responsibility for preparing notifications.
• Information obligations between the parties.
• The effect of regulator questions.
• Long-stop dates.
• Changes to deal terms.
• Restrictions on implementing control before clearance.

Have the agreements reviewed so that the regulatory condition reflects the transaction’s actual mechanics.

Coordinate ownership changes with an authorisation application

A funding round during application preparation may change more than the shareholder schedule.

It can affect:

• Funding forecasts.
• Governance.
• Management appointments.
• Group structure.
• Conflicts.
• Strategy and product plans.
• Information previously supplied to the FCA.

A recommended process is to maintain a single ownership record and update affected application materials consistently.

Distinguish assessment of owners during an initial application from statutory change-in-control obligations for an already regulated target. Identify which requirements apply at each stage.

In our scenario, the founders revise the transaction timetable and obtain the investor’s supporting information early. They also reconcile the proposed board arrangements with their authorisation documents.

Acquisition approval does not expand permissions

A buyer may intend to add products, change execution arrangements or introduce custody after acquiring a company.

Those proposals require their own permission and operational assessment.

The broader crypto framework applies relevant governance, conduct, resilience and reporting requirements. 

Keep three workstreams coordinated:

1. Ownership and controller assessment.
2. Any required permission changes.
3. Implementation of the post-acquisition operating model.

Purchasing a regulated company does not automatically authorise every activity in the buyer’s business plan.

Preparing your ownership assessment with CRYPTOVERSE

CRYPTOVERSE is a specialist legal and regulatory firm for UK FCA cryptoasset authorisation support.

CRYPTOVERSE can support ownership mapping, controller and beneficial-owner analysis, transaction planning and preparation of regulatory submissions.

Raising capital, acquiring a crypto business or reorganising its ownership? Contact CRYPTOVERSE to assess the regulatory requirements before implementing the change.

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