UK Treasury Aims to Enhance Anti-Money Laundering Efforts with Crypto Supervision Reforms

A consultation paper released by the United Kingdom treasury discusses proposed changes to money laundering regulations that would impact the regulation of crypto assets in various ways.

These changes are a result of a review of the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations from 2017, with the goal of implementing “smarter regulation” to reduce regulatory burden and ensure effective supervision.

The paper emphasizes the importance of a strong supervisory regime for the MLRs to be effective and outlines potential alterations to the supervision of crypto asset service providers.

Currently, some institutions are supervised by the Financial Conduct Authority under both the MLRs and the Financial Services and Markets Act of 2000. The proposed changes suggest that institutions regulated under MLRs would now also need FCA regulation, eliminating the requirement for MLRs authorization.

The consultation paper also expands the FCA’s oversight of crypto assets to include activities such as operating a crypto asset exchange and custody services. Crypto assets not subject to FCA supervision will need to register with the FCA for MLRs supervision.

Differences between assessments made under MLRs and FSMA are highlighted, particularly in terms of control requirements. The paper raises the question of aligning MLRs requirements more closely with those of FSMA for consistency.

Cointelegraph

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