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UK Proposes Stricter Anti-Money Laundering Regulations Targeting Crypto Businesses

UK Proposes Stricter Anti-Money Laundering Regulations Targeting Crypto Businesses

According to the FCA, the consultation aims to set baseline standards for crypto firms, aligning them with traditional finance rules while balancing innovation, consumer protection, and market integrity.

Fact Check
Multiple credible sources, including the UK's Financial Conduct Authority (FCA) and various legal and regulatory analysis firms, confirm that the UK government (specifically HM Treasury) has put forth proposals to create a new, more comprehensive regulatory regime for cryptoassets. These proposals build upon and amend the existing Anti-Money Laundering (AML) regulations that have been in place since 2020, clearly targeting crypto businesses with the intent of strengthening oversight.
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Summary

The UK’s Financial Conduct Authority (FCA) has launched a consultation proposing minimum standards for cryptocurrency firms, expanding oversight beyond financial promotions and anti-crime controls to cover activities such as stablecoin issuance, custody, trading platforms, and staking. The measures include requirements for operational resilience, anti-financial crime systems, and complaint handling. Proportional rules are planned, with lighter requirements on senior management and outsourcing but stricter standards on sector-specific risks like cyberattacks. The consultation follows an April draft Treasury Statutory Instrument to bring crypto under the Financial Services and Markets Act. Meanwhile, the Bank of England’s proposal to cap stablecoin holdings at £10,000–£20,000 for individuals and £10 million for businesses has faced criticism from industry players including Coinbase.

Terms & Concepts
  • Stablecoin: A type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset such as fiat currency.
  • Financial Services and Markets Act (FSMA): A UK law providing the framework for financial regulation, under which crypto activities are proposed to be brought.