The FCA, the UK's Financial Conduct Authority, has published an extension of the obligation requiring 7.000 financial services firms, including cryptocurrency firms, to submit annual financial crime reports.
Titled “Extension of the obligation to report financial crimes annually”, the new extension of obligation that published the UK Financial Conduct Authority, the FCA, requires 7.000 financial services companies, including those providing services with cryptocurrencies, , report on financial crimes in an annual filing.
Previously, the FCA's statement of obligation required such reporting from only 2.500 of the 22.000 service firms present and registered in the country, which are under the supervision of the FCA; but the authority has decided to expand this number and include crypto companies in its reports against money laundering, anti-money laundering and other financial crimes.
Since 2016, the FCA has been supervising firms providing financial services in the country for compliance with existing anti-money laundering rules. The authority published rules and guidance for its proposed introduction of an annual financial crime reporting requirement, known as REP-CRIM. In the annual report, companies subject to the authority's obligation must report on their business activities, regardless of the annual revenues each of them records.
The extension published by the UK financial authority includes cryptocurrency companies alongside banks, building societies, among others. The FCA had announced its intention to include crypto companies in this obligation since last year.
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REP-CRIM: Regulation of financial technology
As the authority points out, the extension of its REP-CRIM regime helps the FCA to supervise companies subject to the declaration regulations, by providing a series of indicators that reflect the risk of money laundering inherent to a specific company. The intention, as explained by the FCA, is to guarantee the security and integrity of investors by obliging companies and organisations to carry out the necessary controls to avoid, identify and report suspicious behaviour and financial crimes related to money laundering or money laundering through their platforms.
At the end of September 2020, the authority opened a public consultation to obtain the opinion of stakeholders regarding extending the scope of this obligation to include crypto companies.
In the UK, regulation applicable to the crypto industry has been gaining traction for some time now. Now the exchanges Cryptocurrency providers and digital asset custody and storage service providers must register with the authority.
Also, those companies dedicated to offering services with derivative products and exchange-traded notes (ETN) based on cryptocurrencies were called to cease their services to retail investors and individual consumers, by virtue of investor protection, as cited by the FCA at the time. This regulation provoked several reactions in the community, who see the measures imposed by the FCA as somewhat exaggerated, which could well have established strict leverage limits to protect investors from exponential losses, instead of imposing a complete ban on this type of financial products.
The authority also noted that increased oversight of the crypto industry is in response to the need to enforce the Financial Services and Markets Act, which includes protecting and enhancing the integrity of the UK financial system.
Continue reading: FCA Crypto Derivatives Regulation Is Here
