FCA is now the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for businesses carrying out certain cryptoasset activities under the amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs). A UK business conducting specific cryptoasset activities falls within scope of the regulations and will need to comply with their requirements.
Among other things, FCA requires cryptoassets businesses to:
- Identify and assess the risks of money laundering and terrorist financing which their business is subject to
- Have policies, systems, and controls to mitigate the risk of the business being used for the purposes of money laundering or terrorist financing
- Where appropriate to the size and nature of its business, appoint an individual who is a member of the board or senior management to be responsible for compliance with the MLRs
- Undertake customer due diligence when entering into a business relationship or occasional transactions
- Apply enhanced due diligence when dealing with customers who may present a higher money laundering/terrorist financing risk
- Undertake ongoing monitoring of all customers to ensure that transactions are consistent with the business’s knowledge of the customer and the customer’s business and risk profile
New businesses carrying out cryptoasset activity in scope of the MLRs must be registered with FCA before conducting business. Existing businesses already conducting cryptoasset activity before January 10, 2020 may continue their business but will need to ensure compliance with the MLRs with immediate effect. All existing businesses undertaking cryptoassets activities must be registered by January 2021. To ensure this deadline is met, these businesses must submit a completed application for registration by June 2020. Existing Financial Services and Markets Act firms, e-money institutions, or payment services businesses undertaking cryptoassets activity will also be required to apply for registration.
Keywords: Europe, UK, Banking, Securities, Cryptoassets, AML/CFT, FCA
Previous ArticleESMA Starts Publishing Questions Received Through Q&A Process
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.
EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS published a statement guidance on dividend distribution by banks.
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.