The United Kingdom's Treasury has unveiled a consultation paper outlining proposed changes to money laundering regulations that could significantly affect the supervision and regulation of crypto assets. These changes aim to streamline supervision efforts, combat criminal activities, and transform the regulatory landscape for crypto firms. Learn more about the potential implications for the crypto industry in this comprehensive news update.
In a move towards "smarter regulation," the UK Treasury is looking to revamp the regulatory framework surrounding money laundering, terrorist financing, and the transfer of funds, particularly concerning crypto assets. The proposed regulatory amendments are a result of a comprehensive review of the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 conducted in 2022, with an emphasis on minimizing regulatory burden, future-proofing regulations, and enhancing the effectiveness of regulatory oversight.
Under existing regulations from 2017, some institutions are overseen by the Financial Conduct Authority (FCA) under both the MLRs and the Financial Services and Markets Act 2000 (FSMA). However, most crypto firms are not under the FCA's supervision and are thus subject to MLRs. The proposed changes outlined in the consultation paper indicate a significant shift in the supervision of crypto asset service providers.
Going forward, institutions regulated under MLRs would require FCA supervision while no longer needing to seek MLR authorization. This adjustment would broaden the scope of FCA control to include new activities like operating a crypto asset exchange and providing custody services. It mandates that crypto assets not under FCA oversight must register with the FCA for MLR supervision, aligning MLR requirements more closely with those of FSMA.
One of the key considerations highlighted in the paper is whether to maintain dual standards of control for various regulatory aspects. The proposal suggests harmonizing the MLR requirements more in line with FSMA to enhance regulatory consistency and efficiency within the sector. It also addresses disparities in assessments made under MLRs and FSMA, particularly concerning the control parameters and thresholds under each regime.
The suggested amendments mark a significant step towards enhancing the supervisory regime governing crypto assets, ensuring a well-functioning regulatory landscape that is responsive, accountable, and adept at combating financial crimes and illicit activities within the crypto industry.
Overall, these proposed changes in the UK's money laundering regulations have the potential to reshape the regulatory environment for crypto assets, ushering in a new era of supervision that balances effective oversight with reduced regulatory burdens. Stay informed about the latest developments in crypto regulation by following our platform for timely updates and insights on this evolving landscape.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)