UK Treasury Identifies Crypto Firms as High Risk for Money Laundering; Plans Stricter Regulations
Summary:
The UK Treasury has identified cryptocurrency firms among the top four entities most at risk for financial corruption, specifically money laundering. The report revealed a significant focus on cryptocurrency firms in anti-money laundering efforts. In an initiative to enhance regulation, the Treasury plans to introduce comprehensive rules for cryptocurrency by July. Additionally, law enforcement now has extended authority to seize, freeze, and destroy illicit cryptocurrency even without making any arrests.
In a recent report by the United Kingdom's Treasury, businesses dealing in cryptocurrency are ranked among the top four entities at a significant risk of financial corruption, specifically money laundering. Analyses on gathered data by the country's leading finance watchdog, the Financial Conduct Authority (FCA), pointed out that cryptocurrency firms are just as prone to the risk of fiscal crime as retail banking, wholesale banking and wealth management institutions.
The report revealed a total of 52.8 full-time expert staff working on Anti-Money Laundering cases within the span of 2022 to 2023, with nearly one-third of their focus on overseeing cryptocurrency companies. Within the same timeline, the FCA's financial crime specialists carried out 231 systematic examinations of financial corporations operating in the UK, and an additional 375 cases relating to fiscal offences and sanctions were identified.
In a wider supervisory effort beyond these full-time examinations, FCA teams initiated a total of 95 investigations into cryptocurrency companies based in the UK.
Key legislative actions are being made to establish clear regulations for local cryptocurrency firms in the UK. The Treasury announced on April 16, its plan to introduce comprehensive regulatory rules for cryptocurrency and stablecoins by July. On April 26, the authority of the UK's National Crime Agency (NCA) and police was extended to permit the seizure, freezing and destruction of cryptocurrency used in criminal activity, without needing to make an arrest prior to these actions.
The newly implemented laws also authorize police to seize items such as passwords and memory devices that could prove useful in investigations, plus the power to keep cryptocurrency assets from being redistributed—usually by incinerating the asset—if it is considered harmful to public welfare. Law enforcement in the UK can now transfer seized illegitimate cryptocurrency to wallets they control. Additionally, crime victims can petition to recuperate funds from their cryptocurrency accounts.
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Published At
5/2/2024 8:04:41 AM
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