The Financial Conduct Authority (FCA) in the UK allocated 30% of its financial crime specialists to oversee crypto asset businesses in 2023 to combat financial crime. Risk assessments identified retail banking, wholesale banking, wealth management, and crypto-asset firms as particularly vulnerable to money laundering activities, leading to a significant number of reviews and on-site visits. The regulator extended its key survey, REP CRIM, to crypto businesses to gather information on anti-money laundering controls and other intelligence reports to pinpoint risks more effectively.
Since January 2020, the FCA has been the AML watchdog for UK crypto businesses, implementing a rigorous evaluation process for new registrations to identify major shortcomings in firms’ anti-money laundering controls. This has led to many applications being withdrawn, rejected, or refused by the FCA. In its March business plan, the FCA emphasized consumer protection, ensuring a fair crypto market, and strengthening its ability to address crypto market abuse. The regulator also aims to promote a competitive UK financial sector within the global landscape.
The FCA has cracked down on misleading advertisements, removing a higher number of misleading ads compared to the previous year. This increased scrutiny follows stricter advertising rules for high-risk investments implemented in July 2023, requiring companies to disclose critical information about crypto products on various online platforms. The FCA issued new guidelines in March targeting financial promotions on social media, including formats like memes, reels, and gaming streams, to ensure fair and accurate information without misleading content.
In its fight against financial crime, the FCA’s team of specialists conducted a significant number of reviews and on-site visits across various sectors, including crypto assets. The regulator identified 375 potential cases, with 95 linked to crypto assets, to tailor their supervisory actions accordingly. The extension of the REP CRIM survey to crypto businesses allows the FCA to gather information on anti-money laundering controls effectively and target risks more precisely. The FCA is committed to enhancing its oversight and regulation of the crypto market to promote consumer protection and foster a competitive financial sector in the UK and globally.
The FCA’s dedication to combatting financial crime in the UK includes allocating a significant portion of its financial crime specialists to oversee crypto asset businesses, conducting risk assessments, reviews, and on-site visits to target sectors vulnerable to money laundering activities. The regulator’s extension of the REP CRIM survey to crypto businesses and other intelligence reports allow for a more effective identification of risks and tailored supervisory actions. The FCA’s strict evaluation process for new registrations of crypto businesses aims to uncover major shortcomings in anti-money laundering controls, leading to the withdrawal, rejection, or refusal of many applications. The FCA’s focus on consumer protection, fair crypto markets, and addressing market abuse demonstrates its commitment to promoting a competitive financial sector in the UK and globally.
