AML/CFT requirements for crypto companies in the UK

At the end of September, Revolut, FinTech providing banking and crypto services, successfully registered with the Financial Conduct Authority (FCA). Registering with the FCA is one of the AML requirements for crypto companies in the UK.

AML requirements and regulation related to crypto assets in the UK

Since January 2020, the FCA has required virtual asset service providers (VASPs) operating in the UK to adhere to specific AML requirements for crypto and register with them under the amended Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).

This amended regulation takes into scope crypto exchange providers (including crypto ATMs, P2P providers, crypto issuers, ICOs) and crypto custodians.

Under the amended regulations, crypto asset companies must comply with a set of AML obligations in regards to:

• Risk assessment and controls with appropriate steps to identify risks of money laundering and terrorism financing (ML/TF);
• Customer due diligence, including identity details and documents, as well as enhanced due diligence in case of high-risk transactions;
• Record-keeping for a period of 5 years and filing the annual financial crime report.

Therefore, all companies providing such services in the UK must fully comply with the obligation outlined in the MLRs. Download the crypto compliance in the UK quick guide to learn more.

Registration with the FCA

One main AML requirement of MLRs is that obliged crypto companies must register with the FCA. The infographic below helps you understand if you would need to register to provide your services in the UK.

The FCA implemented a temporary registration regime (TRR), extended until March 2022, allowing VASPs already in operation to continue servicing the UK market while waiting for the approval of their application. Several VASPs have benefited from this regime, but after the approved registration of Revolut, the temporary registration regime list is now empty.

The complete list of crypto asset companies registered with the FCA can be found here.

How to implement efficient risk management and avoid non-compliance?

Crypto asset companies seeking to expand their offerings to the UK market should ensure they meet every AML requirement set forth in the MLRs.

Scorechain’s blockchain analytics and compliance solution can help you easily implement AML/CFT requirements asked by the regulator, including, for instance:

• Monitoring of crypto transactions, addresses, and wallets related to high-risk jurisdictions, suspected money laundering, to other VASPs, etc.
• Record-keeping, suspicious activity reporting, and due diligence documentation.

Don’t hesitate to ask for a demo and see how you can leverage blockchain analytics for simplified crypto compliance.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 45 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, Tron with TRC10 and TRC20 tokens, and BSC with BEP20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. In addition, 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.