UK regulator reminds cryptoasset businesses to register before end-June 2020

The UK Financial Conduct Authority (FCA) reminds businesses that carry out cryptoasset activity in the UK, that they have to be registered with the regulator to comply with new regulations. In order to ensure that applications are processed on time, the FCA requires firms to submit completed applications for registration by June 30, 2020.

As FinanceFeeds has reported, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor of businesses carrying out certain cryptoasset activities in the UK on January 10, 2020.

Any businesses that commenced carrying on business in the UK immediately before January 10, 2020 and are not registered by the FCA by January 10, 2021 will have to cease carrying on business.

The 30 June date allows the FCA to review submitted applications and raise any follow-up questions with firms, with enough time for that process to be completed before January 10, 2021.

Any new businesses which began operating after January 10, 2020 must be registered with the FCA before carrying out any business.

The regulator notes that firms authorised or registered under the Financial Services and Markets Act 2000, Electronic Money Regulations 2011 or Payment Services Regulations 2017 but undertaking cryptoasset activity subject to the MLRs will also be required to apply for registration. The FCA will proactively supervise firms’ compliance with the new regulations, and will take swift action where firms fall short of desired standards.

When making a registration assessment the FCA will need information relating to a business. The FCA will also need information on the applicant and all key individuals who hold a relevant function at the business to assess whether or not they are fit and proper.

The information the FCA will ask about a cryptoasset business will include, inter alia, program of operations, which sets out the specific cryptoasset activities for the business; a business plan outlining the business objectives, customers, employees, governance, plans and projections; details about individuals, beneficial owners and close links; Anti-Money Laundering/Counter Terrorist Finance framework and risk assessment.

The regulator also requires an applicant to provide information about all cryptoassset public keys/wallet addresses: this should include all of the cryptoasset addresses controlled by the business and used in the activity of the business for each cryptoasset that the business deals with.