A Total of 44 Crypto Firms Have Registered with UK FCA
The Financial Conduct Authority (FCA) has witnessed an increasing number of crypto firms achieving registration, with a total of 44 firms currently registered under the money laundering regulations.
Steve Smart, the joint executive director of enforcement and market oversight, said during a recent event that the FCA has served as both a regulator and a law enforcement agency in countering financial crime.
“We must stay a step ahead of the criminals, whether it is to pre-empt the way they use new technology such as AI and deep fakes or whether it is to work together with the firms we regulate, to ensure their systems and controls keep a step ahead of those seeking to exploit them.”
FCA Requires Firms to Register to Combat Crime
One of the measures employed by the FCA to combat financial crime is the authorization of firms.
Smart emphasized that this process is crucial for maintaining high standards within the industry.
“Through a rigorous process, we check that firms have the right systems and controls in place, underpinned by sound business models, before they can be approved. This is to prevent potential harm to the wider system.”
Acknowledging that the FCA’s processes have been slower than desired in the past, Smart highlighted efforts to eliminate operational backlogs and reduce unnecessary delays.
He noted that 86% of initial cryptocurrency registrations received by the FCA were rejected, withdrawn, or refused due to inadequate compliance with anti-money laundering standards.
Smart also pointed out the importance of data sharing initiatives in preventing harm and encouraged firms and cross-sector partners to participate actively.
“Not all alleged breaches of regulation or the law are easy to spot. We cannot do our detective work alone,” he said.
“Criminals will always pivot to exploit the weakest firms and sectors, so sharing data and intelligence is a vital tool in strengthening our defences.”
Focus on Intelligence
To proactively identify and disrupt harm, Smart emphasized the FCA’s focus on being an “intelligence-led organization.”
The FCA receives an enormous amount of data, including over 7 billion transaction reports from more than 1,300 UK firms and over 500 million order book records daily.
This data is analyzed to investigate regulatory breaches, detect insider dealing, and uncover market abuse.
Regarding the FCA’s recent name and shame proposals, Smart acknowledged the extensive consultation process and expressed gratitude for the responses received.
The FCA will review the feedback and continue engaging with industry stakeholders to determine the way forward.
Last year, the FCA implemented new rules that require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.
📝 A number of cryptocurrency firms operating in the U.K. are rolling risk assessments ahead of new rules set out by the Financial Conduct Authority expected to begin on January 8th.#CryptoNews #FCAhttps://t.co/jDNxeKBPzE
— Cryptonews.com (@cryptonews) January 5, 2024
Key updates include exchanges providing clear warnings to customers about the risks associated with crypto investments.
The FCA has warned that failure to comply can result in criminal charges, including unlimited fines and up to two years’ imprisonment, for domestic and overseas exchanges operating in the UK.
As a result, leading crypto exchanges Coinbase, Revolut, and Binance have updated their mobile and web applications to comply with the new regulations.
