British regulators want crypto firms to share money-laundering data

The UK’s top financial regulator wants to force all crypto exchanges and wallet providers operating in the country to make reports on potential money laundering.


New plan for stricter regulations

Yesterday there was a policy proposal Published. In it, the British Financial Conduct Authority (FCA) said that it plans to increase the obligations of crypto companies. The point here is that companies should provide more information about money laundering practices. The FCA began requesting annual delinquency reports from financial institutions in 2016.

Additionally, under the new proposal, all crypto exchanges and custodial wallet providers will be required to report to the FCA on the risk of financial crime. This is regardless of their gross annual income.

This proposal is only a proposal for now. The FCA is seeking comments until November 23 and plans to issue a policy statement in the first quarter of 2021. There will be new rules.

According to the proposed rules, after January 10, 2022, crypto companies will have to provide information on their next accounting reference date. This date is slightly later than other companies. Crypto firms have until January 10, 2021 to register with the FCA.

Companies are often registered in tax havens such as the Cayman Islands. However, they are often active around the world. The FCA defines “active” as the place where the company carries on its business or has a physical presence through a legal entity.

The FCA said that we may have additional reporting requirements from crypto asset companies in the future.


Reason for new proposal

The FCA wants to collect data from these firms, with its sources focusing on firms engaged in activities that pose the highest risks.

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The additional data requested is the latest in a series of obligations imposed on cryptocurrency companies by regulators. The European Union introduced the Fifth Anti-Money Laundering Directive (AMLD5) in January, which requires cryptocurrency companies to take additional measures to stop money laundering.

The Financial Action Task Force is an international watchdog on financial crime. They recommend that crypto companies share information about their customers when conducting transactions with other crypto companies. The nomination will begin in June. However, the FATF has given its members some leeway due to the pandemic.

Ferdinand Woolridge

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