Title: Cryptocurrency Regulation | AML Guidance for the Crypto- Asset Sector
Headings: The Regulation of Cryptocurrency
The Regulation of Cryptocurrency
New Anti-Money Laundering Regulations expand scope of obliged entities to crypto service providers.
The Regulation of Cryptocurrency
What you need to know – A quick overview for the Crypto Sector
Why the Change?
What's Changing?
Don't Panic
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Content: The potential risk of exploitation for the purposes of money laundering within the crypto industry means it is vital for digital financial providers to take responsibility for preventing the illicit flow of illegal funds via their channels. What's Changing? The enactment of the new anti-money laundering regulations marks the first time that crypto service providers, such as custodian wallet providers, will be subject to AML legislation. Registration
All UK cryptoasset businesses carrying on activities in scope of the anti-money laundering regulations will need to register with the FCA from 10 January 2020 for the purposes of AML supervision and enforcement. New cryptoasset organisations that intend to carry on a cryptoasset activity after 10 January 2020 must be registered before any activity can be carried out. Existing cryptoasset organisations which were already carrying on cryptoasset activity immediately before 10 January 2020 must be registered by 10 January 2021 or stop all cryptoasset activity. Please see the FCA website for more details
Due Diligence
Under the new anti-money laundering regulations, as a regulated entity you now must: Carry out a money laundering risk assessment considering your services, products & customer base
Document an AML policy which outlines your internal AML procedures
Ensure all staff have undergone AML training and retain an annual record for auditing purposes
Adopt a KYC procedure that is risk-based and apply the appropriate level of customer due diligence when needed
Adopt measures, when needed, to understand the ownership and control structure of trusts and companies. You must also check trust and company beneficial ownership registers before establishing a business relationship, and to report any discrepancies found to company house
Don't Panic
The new legislation has received backlash from certain crypto service providers, for example Bottle Pay, who decided to shut shop & cited the new law as the reason for its closure. "The amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.”