With the UK Financial Conduct Authority (FCA) cracking down on the cryptocurrency industry and crypto providers, organisations need to act fast to implement robust processes and regulations. The FCA has given to 31st March 2022 for all organisations to comply with their latest crypto regulations.
According to the FCA, cryptoassets are considered to be very high risk and speculative assets. The crypto boom has seen a number of new players come onto the market, often with a lack of knowledge surrounding operational regulations. This has flagged the need for there to be heightened regulation across the crypto space.
What are cryptoassets?
Cryptoassets cover a wide range of tokenised assets, which aren’t just limited to cryptocurrencies. Currently, the most well known forms of cryptoassets include tokens like Bitcoin and Ether.
Also nicknamed “exchange tokens”, these assets can be used as a method of payment for goods and services. Microsoft became an early adopter of crypto, allowing the use of cryptocurrency to be accepted to make gaming and software purchases.
Due to the largely unregulated space they trade in, most cryptoassets are not backed by a central bank or other authority. In addition, this means they are not considered to be a currency or money.
The Financial Conduct Authority new requirements
The UK Financial Conduct Authority has warned that a concerningly high number of cryptocurrency firms are failing to meet UK money laundering rules. The FCA requires crypto businesses to apply to the Temporary Registrations Regime (TRR) by 31st March, 2022. At present, many of the cryotasset companies are failing to meet the current anti-money laundering requirements.
For these companies, and with the news of the ever stringent regulations, many entities have now withdrawn their applications. UK cryptoasset businesses have until the deadline to comply with AML regulations and register with the FCA. Exchange tokens and many other cryptocurrencies are to be continually regulated in the UK for money laundering purposes.
Who does this apply to?
From the new legislation set out by the FCA, all entities who are involved with the buying, selling, transferring and storing of cryptoassets must ensure they meet the guidelines.
- Crypto Wallets
- Cryptocurrency ATMs
- P2P Exchange Platforms
- Virtual Asset Service Providers
- Cryptoasset Exchange Services
- Companies that safeguard their customers’ cryptoassets
Making sure your organisation meets the requirements
The anti-money laundering requirements span across KYC and customer due diligence for checks on cryptocurrency users, such as photographic ID on official documents and their legal name. Getting support from an external service provider can be the best way to make sure you mitigate risk and are fully compliant with the FCA regulations.
Contineo FRS provides specialist regulatory support to aid all organisations in the crypto space, supporting their fight against Financial Crime. Keeping up with the rules and regulations enforced by the FCA is essential, and we focus on assessing whether or not an organisation is able to demonstrate its compliance under the regulations by carrying out a thorough analysis to review, identify and challenge their current processes.
Our bespoke software using groundbreaking technologies enables companies to enhance their AFC processes, monitor suspicious activity and carry out bespoke testing, all while receiving around the clock support from our experts.
March 31st 2022 might seem like you have plenty of time, meaning you can be a bit more relaxed about putting plans and processes into place. However, these new regulations can take time to implement, and bear many challenges of managing new processes and conducting business within your company. Act now to ensure your organisation is compliant with the impending FCA anti-money laundering and counter terrorist financing regulations.
At Contineo FRS, we have a team of highly skilled analysts who can help get your organisation up to speed with the new regulations, so you can have confidence in your AML and KYC procedures. Our team will be happy to give you a free consultation or demo on our regulatory support services and our latest financial crime compliance product, FCGuard. Simply email firstname.lastname@example.org to book an appointment today. Find out about more industry updates on our LinkedIn page.