Several crypto firms located within the U.K. could soon be faced with more extensive AML [Anti-Money Laundering] reporting requirements.
In line with a recent consultation paper revealed this month, the FCA [Financial Conduct Authority] proposed broadening annual financial crime reporting obligations to incorporate all crypto-currency asset exchange & custodian wallet providers.
The regulator reveal that by extending its reporting rules to a wider range of firms, it’ll be able to deepen its understanding of which firms may have intrinsic money laundering risks due to their activities.
The report claims that the data provided through more inclusive annual reports will assistance the FCA’s supervisory approach within the financial sector to become more “data-led.”
Since from 2016, the FCA has been seeking to use data analytics to innovate its regulatory approach & reduce the burden on enterprises, while mitigating money laundering risks to the United Kingdom’s economic system & ensuring its overall integrity.
More data, consistent with the paper, permits a risk-based and targeted approach to financial crime supervision.
The regulator estimates that by extending reporting obligations to a wider range of firms, along with the crypto-currency asset service providers, it’ll acquire data for over 4,500 firms annually.
Reporting obligations are regardless of firms’ total annual revenue. In their reports, businesses are required to reveal the resources they allocate to tackling financial crime and therefore the number of suspicious activity reports they undergo the National Crime Agency.
The wider context of the FCA’s proposal is a review of the U.K.’s legislation & regulatory rules in reference to the EU’s 5th Money Laundering Directive [5MLD], that came into force earlier in the month of January. Its provisions extend AML rules to specific firms within the crypto-currency asset sector.
The United Kingdom has also recently amended its AML measures to reflect recommendations from the FATF [Financial Action Task Force], which transcend 5MLD to incorporate activities like ICOs [Initial Coin Offerings].