A report from the Solana Research Institute cautions that the UK's proposed cryptocurrency regulations may impose significant compliance burdens on blockchain infrastructure providers, including validators, staking services, and non-custodial wallet companies. The report highlights concerns that the UK's regulatory approach, particularly regarding delegated and liquid staking, as well as non-custodial wallets, could disconnect the country from international blockchain markets. The report argues that applying traditional financial regulatory frameworks to these blockchain activities may not accurately reflect their operational realities, as users often retain control over their assets. Compliance costs could significantly impact medium-sized validators, potentially consuming 15% to 30% of their annual revenue. This financial strain may drive UK-based businesses to relocate abroad, while overseas platforms impose geographic restrictions on UK users. The UK's participation in open blockchain infrastructure is reportedly declining as a result. The debate continues over whether blockchain service providers should be regulated as financial intermediaries or as technology infrastructure. While some advocate for stricter regulations to address consumer protection and operational risks, others warn that such measures could stifle innovation and weaken the UK's ties to the global blockchain ecosystem. The UK's Financial Conduct Authority is still consulting on these regulatory boundaries, with plans to implement changes by October 2027.