The UK’s main financial regulator wants to force all cryptocurrency exchanges and wallet providers operating in the country to release reports of possible money laundering.
New proposal for stricter regulation
A policy proposal was posted yesterday. In it, the UK’s Financial Conduct Authority (FCA) said it plans to increase liabilities for crypto firms. This relates to the fact that companies must provide more information about money laundering practices. The Financial Conduct Authority (FCA) began requiring annual crime reports from financial institutions in 2016.
In addition, under the new proposal, all cryptocurrency exchanges and custodial wallet providers must provide the Financial Conduct Authority (FCA) with a financial crime risk report. This is regardless of their total annual income.
For now, the proposal is just a suggestion. The FCA is collecting comments until November 23 and plans to release a policy statement by the first quarter of 2021. It will then contain the new rules.
Under the proposed rules, crypto companies must provide information from the next accounting reference date after January 10, 2022. This date is a bit later than other companies. Crypto companies have until January 10, 2021 to register with the Financial Conduct Authority (FCA).
Corporations are often registered in tax havens such as the Cayman Islands. However, they are often active all over the world. The FCA defines “assets” as the place where a company conducts business or has a physical presence through a legal entity.
The Financial Conduct Authority (FCA) has stated that there may be additional reporting obligations in the future that we may require from crypto asset firms.
The reason for the new proposal
The Financial Conduct Authority (FCA) wants to collect data from these companies to ensure their resources are focused on companies that engage in activities that may pose higher risks.
The additional data requested will be the latest in a series of obligations imposed on cryptocurrencies by regulators. The European Union launched the Fifth Anti-Money Laundering Directive (AMLD5) in January, which requires cryptocurrencies to take further action to stop money laundering.
The Financial Action Task Force is the international financial crime watchdog. They recommend that crypto companies share information about their customers when processing transactions with other crypto companies. The recommendation was due to start in June. However, the FATF has given its members some space due to the pandemic.
