Crypto businesses in the UK are set to come under even greater scrutiny based on new plans by regulators in the country. The Financial Conduct Authority (FCA) continues to mandate strict compliance with financial laws for all cryptocurrency activities in the UK.
FCA Extends Financial Crimes Overwatch to Cryptocurrencies
According to a document recently released by the FCA, the UK’s regulatory watchdog plans to extend financial crime reporting requirements to crypto businesses in the country. The move forms the latest compliance mandate to be levied on cryptocurrency activities in the U.K.
Under the new paradigm, crypto exchanges and wallet providers will need to submit detailed financial reports regardless of their total annual revenues. This new requirement will reportedly come into force from January 2022.
For the FCA, the planned extension is part of efforts by the regulator to update its anti-money laundering oversight activities. As part of the document, the FCA argued that such measures will contribute to ensuring that the agency’s regulatory protocols are “data-led.”
An excerpt from the report reads:
“We consider that this approach will result in improving firms’ money laundering systems and controls, reduce actual risks of money laundering, and help improve the overall integrity of the UK financial system. It is also in line and builds on our data strategy, announced earlier this year, to use data and data analytics to transform the way we regulate and reduce the burden on firms.”
The planned expansion to include crypto businesses under financial crimes reporting laws is also in keeping with the EU’s fifth anti-money laundering directive (AMLD-5). According to the report, the Financial Action Task Force (FATF) had in 2018 advised the FCA to broaden its financial crime supervision and enforcement to cover all firms under its watch.
More Regulations for UK Crypto Businesses
Apart from bringing crypto firms under financial crimes reporting requirements, the FCA also revealed that additional reporting obligations might be required of crypto businesses in the future. In 2020 alone, UK regulators have increased their monitoring of the country’s cryptocurrency industry.
As previously reported by BTCManager, the FCA has since mandated that all crypto startups in the country apply for operating licenses from the agency. The FCA has also issued warnings about cryptocurrency exchanges doing business in the country without the necessary approvals.