FCA to include cryptocurrency firms in financial crime reporting rules

The UK’s financial watchdog, the Financial Conduct Authority, has published in consultation paper that suggests all cryptocurrency firms should abide by annual financial crime reporting obligations.

The consultation paper also states that guidance will include all crypto asset exchange and custodian wallet providers.

It aims to clamp down on money laundering and financial crime in the UK, with cryptocurrencies facing the risk of being used by criminal due to the relatively anonymous nature of blockchain technology.

The FCA estimates that by requiring annual reporting from cryptocurrency firms it will add 4,500 data sets every year as it attempts to lead a “data-led” focus on financial crime.

Earlier this year there was an update to the UK’s legislation and regulatory rules in relation to the European Union’s 5th Money Laundering Directive (5MLD), with it now including crypto companies.

This switch of focus by the regulator comes alongside wider action on a global scale, with the SEC, CFTC and FATF all imposing new rules on the crypto sector this year.

The Financial Action Task Force (FATF) recently updated its controversial Travel Rule that means virtual asset providers must communicate and share customer transaction details with other exchanges.

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