UK Crypto Firms To Potentially Face Anti-Money Laundering Reporting Requirements

UK crypto firms to potentially face anti-money laundering reporting requirements. The Financial Conduct Authority proposed, in a consultation paper released this month, to expand annual financial crime monitoring responsibilities to include all crypto-asset exchange and custodian wallet providers.

The regulator says it will be able to expand its understanding of which companies could have intrinsic risk of money laundering due to their activities by expanding its reporting regulations to a broader variety of firms.

The paper claims that the information provided through more inclusive annual reports will help the FCA’s supervisory approach in the financial sector to become more “data-led.”

Reporting responsibilities are irrespective of the gross annual income of the businesses. Businesses are expected in their reports to reveal the resources they devote to combat financial crime, and the amount of suspicious activity reports they send to the National Crime Agency.

The wider context of the FCA’s proposal is a review of the U.K.’s legislation and regulatory rules in relation to the European Union’s 5th Money Laundering Directive (5MLD), which came into force this January. Its provisions extend AML rules to specific firms in the crypto asset sector.

The U.K. has also recently amended its Anti-Money Laundering measures to reflect recommendations from the Financial Action Task Force, which go beyond 5MLD to include activities such as initial coin offerings.

[image: Emily Wang]

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