UK Treasury Aims to Enhance AML with Crypto Supervision Changes
The Treasury in the United Kingdom has published a consultation paper proposing changes to money laundering regulations that would impact the regulation of cryptocurrencies. These changes come as a result of a review of the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations conducted in 2022. The aim of the proposed changes is to establish “smarter regulation” that reduces the regulatory burden, ensures regulations are a last resort rather than a first choice, and promotes a well-functioning landscape of responsive and accountable regulators.
The consultation paper emphasizes the importance of a robust supervisory regime alongside effective regulations. It outlines several ways in which the supervision of crypto asset service providers might be modified. Currently, the Financial Conduct Authority (FCA) supervises certain institutions under both the Money Laundering Regulations and the Financial Services and Markets Act. Most crypto firms are not supervised by the FCA and therefore fall under the Money Laundering Regulations.
Under the proposed changes, institutions regulated by the Money Laundering Regulations would also require FCA regulation but would no longer need to seek Money Laundering Regulations authorization. This means that crypto asset service providers would need to register with the FCA for supervision under the Money Laundering Regulations, even if they are not subject to FCA oversight.
The Financial Services and Markets Act currently places cryptocurrencies under FCA control if they serve as underlying assets or property for regulated activities or financial instruments. The paper suggests expanding the reach of the Act to cover new activities, such as operating a crypto asset exchange and custody. This change would mean that crypto assets not previously subject to FCA oversight would now need to register with the authority for Money Laundering Regulations supervision.
One area of difference between the Money Laundering Regulations and the Financial Services and Markets Act is the requirements for control and the thresholds for such control. The consultation paper raises the question of whether to maintain two separate standards and proposes aligning the Money Laundering Regulations more closely with the requirements of the Financial Services and Markets Act.
The consultation paper puts forward proposals to enhance the regulation of crypto assets in the United Kingdom by introducing smarter and more effective regulations. The aim is to strike a balance between regulatory burden and the need for robust oversight, ensuring a well-functioning and accountable regulatory landscape for crypto asset service providers.
7 thoughts on “UK Treasury Aims to Enhance AML with Crypto Supervision Changes”
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I’m thrilled that the UK Treasury is prioritizing a well-functioning landscape for crypto assets. It’s crucial to adapt regulations to the evolving needs of the industry.
It’s great to see the UK Treasury taking a proactive approach to regulating cryptocurrencies. Let’s set a global example with smarter and more effective regulations!
I applaud the aim of reducing the regulatory burden while ensuring a well-functioning regulatory landscape for crypto assets. It’s all about finding the right balance!
Kudos to the UK Treasury for emphasizing the importance of effective regulations in the crypto space. It’s time for responsible and accountable regulators! 🌐👏
These proposed changes to money laundering regulations are unnecessary and burdensome. It’s just going to make it more difficult for cryptocurrency businesses to operate.
Why should crypto asset service providers have to register with the FCA if they’re not even subject to their oversight? It’s just creating unnecessary bureaucracy.
Expanding the reach of the Financial Services and Markets Act to cover new activities is just going to stifle innovation in the crypto industry. It’s a step backwards.