The FCA is the new anti-money laundering and counter-terrorist financial (AML/CTF) supervisor of cryptoasset businesses based in the UK under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
If you are a cryptoasset business in the UK from 10 January 2020 you will be required to register with the FCA.
Cryptoasset exchange providers include:
- Cryptoasset automated teller machines (ATMs),
- Peer to peer provides
- Issuers of cryptoasset - initial coin offer (ICO),
- Issuers of cryptoassets – initial exchange offering
- Custodian wallet providers
Cryptoasset activity description
Your business must register if it is providing the following services concerning the above cryptoassets:
a. exchanging, or arranging or making arrangements with a view to the exchange of, cryptoassets for money or money for cryptoassets,
b. exchanging, or arranging or making arrangements with a view to the exchange of, one cryptoasset for another. For example, cryptocurrency exchanges fall under this description.
c. operating a machine which utilises automated processes to exchange cryptoassets for money or money for cryptoassets. ATMs providing cryptocurrencies e.g. Bitcoin is an example falling under this category.
d. a firm or sole practitioner who by way of business provides services to safeguard, or to safeguard and administer. Examples include cryptoassets on behalf of a customer, or private cryptographic keys to hold, store and transfer cryptoassets.
Timeline to register
Businesses are required to comply with the money laundering regulations from 10 January 2020. New cryptoasset businesses that intend to carry out a crypto-based activity must be registered before carrying out any activity. Existing cryptoasset businesses that were already carrying out cryptoasset activities before 10 January 2020 may continue to provide such activities but must register with the FCA by 10 January 2021.
Cryptoasset business compliance requirements
1. Identifying money laundering and terrorist financing risks.
2. Assessing ML/TF risks related to new technologies.
3. Have in place appropriate policies, systems and controls to mitigate ML/TF risks.
4. Where appropriate and depending on your firm’s size and nature of its business, appoint a member of the board or senior management team to be responsible for compliance with the money laundering regulations as your nominated officer.
5. Where appropriate, depending on the size and nature of your business, establish an independent internal audit function.
6. Conduct screening of employees.
7. Conduct customer due diligence when entering into a business relationship or transaction.
8. Apply enhanced due diligence measures where a customer presents a higher ML/TF risk. A higher risk would be presented by a person deemed as a politically exposed person (PEP).
9. Conduct ongoing monitoring on all customers.
£2,000 – for businesses with a cryptoasset income of up to £250,000
£10,000 – for businesses with a cryptoasset income of greater than £250,000
The registration information you will need to provide
The FCA will need some key information about your business. This includes:
- Business plan
- Programme of operations
- Structural organisation
- Systems and controls
- Details of key individuals
- Details of beneficial owners
- Governance arrangements
- Internal control mechanisms
How we can help
Buckingham Capital Consulting is a leading international consulting firm, specialising in payment services, electronic money, banking and investment services. We can help you with licencing, compliance, operational setup and related services, including, obtaining banking facilities. For more information, visit our website on www.buckinghamcapitalconsulting.com.
Call us today on 020 7866 2512 or 0800 689 0501. Alternatively, please send an email to firstname.lastname@example.org to discuss your requirements. We are also able to arrange calls or conference calls using Skype. Our Skype ID is BCC54321. If you wish, we can arrange a meeting at one of our offices.