FCA Will Supervise UK Crypto Assets AML and CTF


The UK’s Financial Conduct Authority (FCA) will supervises anti-money laundering (AML) and counter-terrorist financing (CTF) for companies that perform crypto asset-related activities. Effectively from the 10th of January, UK companies operating crypto assets must register with the FCA.

12 January, 2020 | AtoZ Markets – After years of contemplating on Crypto regulations in the UK, the FCA has now become the main body to supervise AML and CTF of UK firms involving in crypto asset activities. The FCA will monitor companies which are engaged in certain crypto asset activities under the amended Terrorist Financing, Money Laundering, and Transfer of Funds Regulations 2017 (MLRs). From the 10th of January 2020, new businesses carrying out crypto-asset activity must be registered with the FCA before conducting businesses.

FCA will Supervise Crypto Asset Related Operations in UK

According to an official announcement, the FCA has established a list of requirements for crypto-related activities, which includes:

  • Identifying and assessing AML and CFT risks.
  • Developing policies and controls to eliminate the risks associated with AML and CFT.
  • Conducting due diligence for customers and others.

FCA will proactively monitor companies’ compliance with the new regulations. Also, the FCA will take prompt action when companies don’t meet the desired standards and cause risks to market integrity.

Any UK company that performs specific crypto asset activities falls within the scope of the regulations. Therefore, these crypto firms will have to comply with their requirements. FCA will require crypto asset companies to comply with the following:

  • Identify and evaluate the money laundering and terrorist financing risks which their activity is subject to;
  • Where appropriate to the size and nature of its business. In order to appoint a member of the board of directors or senior management responsible for compliance with MLRs;
  • Have systems, policies, and controls in place to mitigate the risk that the business will be used for terrorist financing/money laundering purposes;
  • Perform due diligence of customers when entering into a business relationship or occasional transactions;
  • Apply more intrusive due diligence, when dealing with customers who may present a greater risk of money laundering/terrorist financing;
  • Undertake ongoing monitoring of all customers. It also ensures that transactions are consistent with the business’s knowledge of the customer and risk profile.

Read More: Belarus Exempts Forex Trading Taxes Indefinitely

UK Authorities Are Open to Crypto Innovations

The new requirements apply to crypto-asset exchange providers (including crypto-asset ATM, peer to peer providers or initial exchange offerings), and custodian wallet providers. In October 2020, FCA already announced that it will start supervising AML and CFT starting on the 10th of January. 

The regulator, proposed in October last year to distribute the recovery costs of setting up and operating the registration process. The FCA estimated that the whole cost of this process at around 400,000 euros, whilst the FCA is aware of about 80 applicants. Hence, the UK regulator proposed to set the FCA Cryto Asset registration fee at 5,000 euros.

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