Finance in a Cryptoasset Firm Under the FCA Regime

Cryptoasset finance is the newest corner of UK regulated finance and the one where the gap between what firms need and what the market supplies is widest. The work combines conventional financial control with obligations that resemble client money without being it, valuation questions with no settled practice, and a regulatory perimeter that has moved repeatedly. This guide sets out what a Financial Controller actually owns in a cryptoasset firm, where the difficulty concentrates, what transfers from adjacent sectors, and what the roles pay.

A note on scope: the regulatory position for cryptoassets in the UK has developed considerably and continues to. This guide covers the finance function’s practical remit rather than the regulatory position, which should be taken from the FCA’s cryptoasset pages and the firm’s own advisers.

The perimeter question comes first

As with payments, everything follows from what the firm is actually registered or authorised for, and it is regularly assumed rather than established. A firm may be registered for anti-money-laundering supervision as a cryptoasset business, may hold e-money or payments permissions for the fiat side of its operation, may be authorised for regulated activities where its products fall inside the perimeter, or may sit largely outside it.

Each produces a different set of finance obligations, and the same group frequently holds several. The first thing an incoming FC should establish — and the first thing an employer should state in a job specification — is which entity holds which permission and what follows from each.

Reserve and client asset reconciliation

The defining operational discipline, and the one that most resembles client money without being governed by the same rules.

Where a firm holds cryptoassets or fiat on behalf of customers, someone has to demonstrate daily that what is held matches what is owed. That means reconciling on-chain balances across wallets and custodians, exchange and venue balances, and fiat held at banks or safeguarding institutions against the customer liability recorded in the firm’s own systems.

The difficulty is that these live in entirely different places: a blockchain explorer, a custodian’s portal, an exchange API and a ledger, none of which agree on timing or granularity. Our guide to stablecoin reserve reconciliation covers the discipline in detail, and it applies with variations across the sector.

Where the fiat side sits in an authorised payments or e-money entity, safeguarding obligations attach to it directly — and the reconciliation between the two sides of the business is frequently where errors accumulate.

Valuation and accounting

The technical half, and the area with least settled practice.

Measurement. How cryptoassets held are classified and measured depends on the nature of the holding and the applicable framework, and it is a genuine judgement rather than a lookup. The FRC frameworks were not written with these assets in mind, which is why the treatment needs documenting carefully — see writing technical accounting memos.

Own versus customer assets. The distinction that matters most on the balance sheet, and the one auditors examine first.

Revenue recognition on trading spreads, transaction fees, staking or yield arrangements and subscription products — each with its own timing question.

Volatility. Positions that move materially between the reporting date and the sign-off date, which affects both the accounts and the capital position where one applies.

And the audit. Auditing existence of on-chain assets is a genuinely different exercise, and firms should expect their auditor to want evidence of control over keys as well as of balances.

What transfers into this sector

Three backgrounds produce credible candidates, and one does not.

Payments and e-money finance transfers best. Safeguarding discipline, daily reconciliation of money in flight, and settlement across parties the firm does not control are all directly applicable — our guide to finance in a payments or e-money firm covers that ground.

CASS and client money transfers well for the same reason: the mindset that customer assets are not the firm’s, and the discipline of daily proof.

Investment firm finance transfers where the firm holds regulated permissions and a capital requirement applies.

A purely commercial background does not, and this is the sector where that matters most — because the firm is frequently young, the process does not exist, and there is nobody senior to check the judgements.

Where firms struggle

Reconciliation built in spreadsheets by one person. Universal in the sector and increasingly fragile as volumes grow.

Perimeter drift. A product changes, and nobody re-examines whether it has moved the firm’s regulatory position — a compliance question that finance frequently notices first because the money flows change.

Accounting judgements undocumented. Treatments applied consistently for two years with no memo explaining why, discovered at audit.

Growth outpacing control. The most common failure. Firms in this sector scale volume faster than almost any other, and the finance process that worked at launch stops working quietly.

And key-person concentration, more acute here than elsewhere because the person who built the reconciliation frequently also understands the wallets.

What the roles pay

Cryptoasset finance prices at or above the wider regulated premium, for two reasons: the pool of people who have done it is smaller than in any other regulated sub-sector, and firms competing for them are frequently venture-backed with the ability to pay. Equity is commonly a meaningful part of the package, and the leaver provisions matter as much as the allocation — see our bonus and incentive benchmarks. Wider bands are in the regulated-firm finance salary guide.

Specifying the role

Four points. State the permissions by entity — AML registration, e-money, payments, regulated activities — because it determines the obligations and reaches the right pool. Describe what is held and where: own assets, customer assets, custodial arrangements, exchange balances. Say whether the reconciliation exists and who built it; candidates worth hiring want to know whether they are running a process or designing one. And be honest about scale and stage — pre-revenue, scaling, or established changes the job entirely.

Qualification — ICAEW, ACCA or CIMA — is the baseline, and the adjacent-sector experience is what you are buying. Our cryptoasset and digital assets finance practice covers the search.