UK regulator plans to extend financial crime reporting obligation to cryptoasset exchange providers

Maria Nikolova

The FCA believes that the obligation has to apply to a wider range of firms, including ones that potentially pose higher money laundering risk.

The UK Financial Conduct Authority (FCA) today published a consultation paper on extending the annual financial crime reporting obligation.

In July 2016, the FCA introduced an annual financial crime reporting obligation for certain firms. This gives the regulator information on a range of indicators that reflect the potential money laundering (ML) risk of the firm, based on its regulated activities and the nature of its customers.

The obligation to provide financial crime information is set out in the FCA’s Handbook SUP 16.23 Annual Financial Crime Report (REP-CRIM).

Approximately 2,500 out of the approximate 23,000 firms the FCA supervises under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) submit REP-CRIM information.

Now, the FCA proposes to extend the scope of firms required to provide the regulator with REP-CRIM information to include firms that carry on regulated activities that the FCA considers potentially pose higher money laundering risk. This extension will be irrespective of a firm’s revenue threshold.

Under this proposal, the following additional firms would need to provide the FCA with REP-CRIM information irrespective of their total annual revenue:

  • all FSMA authorised firms within the scope of the MLRs and:

– that hold client money or assets, or

– that carry on an activity that we consider poses higher ML risk

  • all payments institutions except for payment institutions that only carry out at least one of the following payment services:

– Money remittance only – that are supervised by HMRC for anti-money laundering (AML) purposes.

– Account information services and/or payment initiation services. These firms do not receive or hold clients’ money and do not carry out payment transactions, and so potentially pose a low ML risk.

– EEA-authorised payment institutions which are permitted to provide a payment service in the UK only under the freedom to provide services.

  • All electronic money institutions.
  • All Multilateral Trading Facilities (MTFs).
  • All Organised Trading Facilities (OTFs). OTFs are a type of firm introduced by MiFID II, therefore bringing them within the scope of the MLRs and the REP-CRIM obligation.
  • All cryptoasset exchange providers and custodian wallet providers. These firms are new categories of firms within the scope of the REP-CRIM obligation

Comments are invited until 23 November 2020. The FCA will consider the feedback and plan to publish a Policy Statement (PS), including any final rules, by the first quarter of 2021.

As FinanceFeeds has reported, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for businesses engaging in certain cryptoasset activities under the amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs) in January 2020. Any UK business conducting specific cryptoasset activities falls within scope of the regulations and will need to comply with their requirements.

Read this next


BlockDAG Targets 20,000x ROI, Excels Beyond Litecoin’s Rise, and Enhances Ethereum Layer 2 Activity

Explore BlockDAG’s promising 20,000X ROI as it leads, with significant developments in Ethereum Layer 2 and a surge in Litecoin’s value post-Dencun upgrade.

Digital Assets

Hong Kong regulators approve spot Bitcoin and Ether ETFs

Hong Kong-based asset managers received approval from regulators on Monday to launch spot Bitcoin and Ether ETFs.

Digital Assets

Vitalik Buterin backs Railgun with $350K, RAIL price triples

Privacy cryptocurrency Railgun (RAIL) skyrocketed over 250% following a positive comment from Ethereum co-founder Vitalik Buterin.

Digital Assets

Uniswap hits $2 trillion in trading volume ahead of SEC’s lawsuit

Decentralized finance (DeFi) exchange Uniswap crossed $2 trillion in total trading volume despite escalating competition from other networks and regulatory setback.


BlockDAG’s $17.3M Presale Success Elevates Security Beyond Ethereum Classic Value and Fantom Trends

Explore how BlockDAG’s advanced security with batch 9 entry and $17.3M raised outshines Ethereum Classic value and Fantom’s market moves.

Institutional FX

Finalto secures two prestigious awards at iFX EXPO LATAM 2024

Trading software and liquidity services provider Finalto received two accolades at the iFX EXPO LATAM 2024 held in Mexico City earlier this month.


SEABW Turns the Spotlight on Southeast Asia’s Flourishing Web3 Landscape With Over 40 Side Events and an All-encompassing Agenda

Southeast Asia Blockchain Week (SEABW), a premier blockchain conference exploring the evolving landscape of Web3 in the Southeast Asia region, is proud to announce that there will be over 40 side events, web3 meetups, workshops, and social gatherings.

Digital Assets

Landesbank Baden-Württemberg to offer crypto custody

Germany’s largest federal bank, Landsbanki Baden-Württemberg (LBBW), partnered with Austrian-based Bitpanda to provide “investment-as-a-service” infrastructure for cryptocurrencies. The new service will offer institutional and corporate clients the ability to store and procure digital assets such as bitcoin and ether.

Digital Assets

VALR Secures Regulatory Licenses from FSCA as a Leading Crypto Asset Service Provider in South Africa

VALR, the prominent crypto exchange backed by Pantera Capital and based in Johannesburg, has achieved a significant regulatory milestone by obtaining both a Category I and Category II license from the Financial Sector Conduct Authority (FSCA) of South Africa.