- The UK's FCA has reminded crypto companies that they must submit applications to register with it by the end of June.
- Companies that aren't registered by 10 January 2021 will be forced to shut down.
- The FCA is acting to force crypto companies to comply with new anti-money laundering regulations.
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The UK’s Financial Conduct Authority today reminded cryptocurrency businesses that they must submit completed applications for registration to the organization by the end of the month, in order to allow time for processing ahead of the January 2021 deadline for registration.
The FCA supervises the UK’s efforts against money laundering and the financing of terrorism, and assumed extra authority over cryptocurrencies on January 10 of this year.
“Any businesses that started carrying on business in the UK immediately before 10 January 2020 and are not registered by the FCA by the 10 January 2021 deadline will have to cease carrying on business,” it wrote.
“Any new businesses which began operating after 10 January 2020 must be registered with the FCA before carrying out any business.”
The FCA, the FATF and AMLD5
On January 10, the Fifth Money Laundering Directive came into force in the UK.
The EU-wide directive, termed AMLD5, clamped down on crypto companies. It extended the scope of know-your-customer (KYC) measures that exchanges must take; crypto companies must also register with the FCA, and have to be approved by it.
And with good reason: cryptocurrencies remain a popular choice among criminals who value their privacy features. According to a report by blockchain analysis firm CipherTrace earlier this month, 0.69% of all crypto transactions to UK exchanges came from criminals. It said that’s because there’s a “pervasive presence of Russian dark markets on UK exchanges.”
That’s why the FCA is arming up. “The FCA will proactively supervise firms’ compliance with the new regulations, and will take swift action where firms fall short of desired standards,” it wrote in its reminder today.
There’s another piece of regulation in town, aimed at combating money-laundering and terrorist finance. That’s the so-called “travel-rule,” a recommendation that comes from the Financial Action Task Force (FATF), a global inter-governmental watchdog with a brief to prevent organized crime, corruption and terrorism.
The FATF requests that crypto exchanges share information about their customers when they execute transactions between businesses—meaning that exchanges and other crypto businesses have to ask for that information in the first place.
Affected countries—there are 39, including the US, the UK and China—must implement the rule by the time FATF next inspects them.
Coupled with the AMLD5 regulations, the FATF travel rule means that the UK’s crypto criminals will soon find themselves facing a much less hospitable environment.