UK Financial Watchdog FCA Now Supervises AML/CTF Compliance of Crypto Businesses

Britain’s Financial Conduct Authority (FCA) now monitors anti-money laundering (AML) and counter terrorist financing (CTF) for companies carrying out cryptocurrency-related activities.

According to an official announcement published on Jan. 10, FCA will supervise whether United Kingdom-registered businesses engaged in crypto asset-related operations are compliant with relevant regulations and requirements.

List of requirements to crypto businesses

Further in the announcement, FCA set forth a list of requirements for cryptocurrency-related businesses, which includes the identification and assessment of risks in regards to AML and CFT, development of policies and controls to eliminate risks associated with AML and CFT, conduction of customer due diligence, and others.

“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,” the announcement said.

Britain’s crypto drama

Back in July 2018, FCA warned that cryptocurrencies pose a huge risk to consumers who are generally misinformed about them, and recommended that products such as derivatives and exchange-traded notes that reference crypto-assets were “ill-suited” to small investors.

Although the FCA is still considering the restriction of crypto derivatives for retail investors, it concluded last summer that major cryptocurrencies are “exchange tokens” which are “usually decentralized and primarily used as a means of exchange.”

At the time, the regulator emphasized that such digital currencies do not fall under the regulatory scope of the FCA and are outside its regulatory purview.

In late November of last year, Piers Ridyard, CEO of the Radix decentralized ledger, told Cointelegraph that U.K. authorities are actually relatively open to crypto innovation, and noted:

“The FCA has been progressive on its views on crypto for years; including monitoring and permitting trials of the technology in sandbox environments before regulatory licenses are needed. The UK generally sees itself as a Fintech leader, and the FCA sees part of its job as not getting in the way of innovation.”