Uk bitcoin money laundering

The UK’s Financial Conduct Authority (FCA) has outlined proposals that it hopes will facilitate its ability to track and prohibit money laundering via cryptocurrencies.

The financial regulator now wants to force all cryptocurrency exchanges and wallet providers operating within the nation to produce reports about possible money laundering. Financial institutions have been forced by the FCA to produce annual crime reports since 2016.

As cryptocurrency firms currently have until January 10, 2021 to register with the FCA, the regulator proposed that firms provide the relevant information “from their next accounting reference date after 10 January 2022.”

Under the new plans, all “cryptoasset exchange providers and custodian wallet providers” will have to provide the regulator with a financial crime risk report “irrespective of their total annual revenue.”

The paper stated that the more thorough and wide-ranging annual reporting will improve the FCA’s supervisory approach, making it more “data-led”.

It also argued that the changes would allow for a risk-based, targeted approach to financial crime by providing insight into which firms have intrinsic money laundering risks.

In the wake of Brexit, the UK is starting to diverge from the European Union in the field of financial regulation. However, British attitudes to cryptoassets have not been in favour of deregulation.

Indeed, in March 2020 the Treasury added extra measures to its existing anti-money laundering cryptocurrency framework. Therese Chambers, the FCA’s Director of Retail and Regulatory Investigations, argued that the changes went “beyond” the EU’s 5MLD regulations “to include a broader set of activities, such as Initial Coin Offerings (ICOS).”

The latest proposals, have suggested requesting from companies; the number of customers in "high-risk" jurisdictions; the number of customers who "refused or exited for financial crime reasons" and  "the top three most prevalent frauds."

The FCA is seeking comments until November 23, 2020 and plans to publish a policy statement, including its new rules, by March 2021 at the latest.