Article: Financial Crime Reporting Rules Extended To Cryptoasset Firms

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Financial Crime Reporting Rules Extended To Cryptoasset Firms

Kevin Pratt, 31 March 2021

The UK’s financial regulator, the Financial Conduct Authority (FCA), has announced a shake-up of its anti-money laundering activities which will see firms dealing in cryptoassets obliged to file annual reports on their trading activities.

The FCA will use the information to determine the potential risk of financial crime, enabling it to target its supervisory resources where it identifies the greatest risk.

Cryptoasset ‘exchange tokens’ such as Bitcoin, Litecoin, Ether and other virtual currencies are only regulated in the UK for money laundering purposes. This means that you have little or no protection if something goes wrong and, as the FCA points out, you should be prepared to lose all the money you invest.

The FCA maintains a register of cryptoasset firms which must comply with money laundering rules. These firms will need to file a financial crime reporting return by 30 March 2022 and annually thereafter.

This obligation already covers financial institutions including banks and building societies. The FCA says the extension of the reporting requirement will raise the number of firms involved from 2,500 to around 7,000.

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