Cryptoassets regime, FCA is to supervise in the future - Thistle Initiatives

What happened?

A cryptoasset regime will be established with support from the FCA to create one of the most “comprehensive global responses” to the use of cryptoassets in illicit activity, the Government has announced in the Economic Crime Plan document published in July 2019. Find details of the Plan here.

Government, law enforcement and businesses have agreed a joint plan to work more closely to tackle fraud, money laundering, bribery and corruption. The move is expected to see improved levels of information sharing, resource pooling and technological innovation. The plan includes action on cryptoassets to ensure these are not being used for money laundering and other illicit activity.

Action 37 of the 52-point Plan details the FCA being established as the supervisor of the future cryptoassets anti-money laundering/terrorism financing regime. It says: “The Government is developing a robust regulatory response to address the risks posed by the use of cryptoassets for illicit activity, as identified by the FATF and the Crypto Asset Task Force.”

The Government plans to bring all relevant cryptoasset businesses into AML/CTF regulation in January 2020.

The FCA will be the supervisor of cryptoasset firms and will draw on its “considerable experience in this area”. In this regard, the Plan states “In recognising the risks that these types of activities pose, the Government is considering expanding the FCA’s supervisory toolkit to ensure it has the appropriate means by which to introduce and maintain a strong AML regime in the UK for relevant cryptoassets firms”.

The Plan also includes:

• A boost to law enforcement capability, with £48 million of previously announced funding to continue to build the National Economic Crime Centre and help the National Crime Agency to better utilise data to proactively target fraudsters and those laundering dirty money,
• Reform of the Suspicious Activity Reporting (SAR) regime, with Barclays, HSBC UK, Lloyds Banking Group, Nationwide, RBS and Santander UK investing £6.5m in 2019/20, in addition to the £3.5m committed by the Home Office this year. All parties will work together on longer-term funding for developing richer intelligence and improving operational effectiveness in the fight against dirty money,
• Promoting innovation in the private sector and encouraging businesses to take advantage of pioneering technologies to combat economic crime, as well as reduce their compliance costs, and

• Implementing the new Asset Recovery Action Plan, setting out a range of measures designed to enhance efforts to claw back the proceeds of crime, including those held abroad.

How can Thistle help you?

Thistle’s expert team is on hand to provide further information, guidance or assistance on any aspect of the FCA’s future work in the cryptoasset and AML space.  Among the services we offer are:

• Analysis of the thinking in the 2019 Economic Crime Plan,
• A summary of the implications for your firm, or
• Help with responding to an FCA information request

If you’d like to know more about any of the topics covered above – or to learn more about how Thistle can help – please get in touch via info@thistleinitiatives.co.uk or call us on 0207 436 0630.