UK focuses more on crypto regulation in latest anti-money laundering report

The UK Financial Conduct Authority’s (FCA) recent anti-money laundering and counter-terrorism financing (AML/CTF) efforts have focused heavily on crypto.

The British Treasury said in a May 1 report that the FCA considers crypto firms – such as retail and wholesale banks and wealth management firms – to be “particularly vulnerable” to financial crime and most at risk of exploitation through money laundering ‘money.

Increased focus

The report highlights that the FCA has increased its focus on the crypto industry in recent years. In 2022 and 2023, the FCA dedicated the equivalent of 52.8 full-time financial crime specialists to AML/CFT, while 15.8 full-time staff, or 30%, were assigned to supervision crypto companies.

The agency’s financial crime specialists conducted 231 desk reviews and seven site visits. Other monitoring teams opened an additional 375 cases, including 95 crypto-related cases.

The FCA has extended new requirements to the crypto sector, including Financial Crime Reporting Obligations (REP-CRIM). It used REP-CRIM data with other information, including but not limited to crypto blockchain analysis, for better risk identification and targeted interventions.

The FCA began acting as an AML supervisor for crypto businesses, including exchanges and custodial wallets, in January 2020. The latest report notes that the agency’s “robust assessment process” led to numerous rejections and withdrawals among candidates, thus improving confidence in the companies that won. approval and demonstrated rigorous controls.

Wider UK crypto regulation

The latest report reviews past activities but also looks to the future.

Charlotte Vere, Baroness Vere of Norbiton, wrote that the FCA would soon announce details of the future structure of the supervisory system in light of a 2023 consultation. She said:

“We… are focused on implementing an ambitious and significant program of changes in AML/CFT supervision. »

Changes in this area follow other regulatory and enforcement developments in the UK. Late AprilBritish police have gained new powers to seize crypto, and in October 2023The FCA introduced a strict crypto promotion and advertising regime.

The UK is also considering more permissive policies, such as a regulatory sandboxwhich allows businesses to use digital ledger technology (DLT) under modified rules and regulations.

Published in: UNITED KINGDOM, Regulation

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