01.10.2020

FCA Becomes AML/CFT Supervisor for Crypto

The FCA is now the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor for businesses carrying out certain crypto asset activities under the amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs).

Any UK business conducting specific crypto asset activities falls within the scope of the regulations and will need to comply with their requirements. For further information please see our dedicated crypto-asset webpage.

Amongst other things, we require crypto-asset businesses to:

  • identify and assess the risks of money laundering and terrorist financing which their business is subject to;
  • have policies, systems, and controls to mitigate the risk of the business being used for the purposes of money laundering or terrorist financing;
  • where appropriate to the size and nature of its business, appoint an individual who is a member of the board or senior management to be responsible for compliance with the MLRs;
  • undertake customer due diligence when entering into a business relationship or occasional transactions;
  • apply more intrusive due diligence, known as enhanced due diligence, when dealing with customers who may present a higher money laundering / terrorist finance risk. This includes customers who meet the definition of a politically exposed person;
  • undertake ongoing monitoring of all customers to ensure that transactions are consistent with the business’s knowledge of the customer and the customer’s business and risk profile.

This is not an exhaustive list. More information can be found on our webpage. We will proactively supervise firms’ compliance with the new regulations and will take swift action where firms fall short of desired standards and cause risks to market integrity.

UK businesses undertaking crypto-asset must register with us:

  • New businesses carrying out crypto-asset activity in the scope of the MLRs must be registered with the FCA before conducting businesses – registration forms are available on Connect. You can find out more about the registration process on our website.
  • Existing businesses already conducting crypto-asset activity before 10 January 2020 may continue their business but will need to ensure their compliance with the MLRs with immediate effect.
  • All existing businesses undertaking crypto asset activities must be registered by January 2021. To ensure this deadline is met, these businesses must submit a completed application for registration via Connect by June 2020.
  • Existing Financial Services and Markets Act firms, e-money institutions or payment services businesses undertaking crypto-asset activity will also be required to apply for registration.

Contact

For any queries regarding the new regime, please email firm.queries@fca.org.uk

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