A report published on May 1 shows that the UK’s financial regulator has earmarked nearly a third (30%) of its financial crime specialists to oversee crypto asset activity in 2023.
The Financial Conduct Authority (FCA) said it had conducted risk assessments across sectors and identified retail banking, wholesale banking, wealth management and cryptocurrency firms as particularly vulnerable to financial crime in 2023. These sectors were found to be most at risk of being used for money laundering.
As part of the fight against financial crime, the FCA’s team of specialists conducted a significant number of reviews. This included 231 in-depth analyses (desk reviews) and seven site visits. In addition, other supervisory teams at the FCA identified 375 potential cases, 95 of which were specifically related to crypto assets.
In addition, in April 2022, the regulator extended a key survey – called REP CRIM – to cryptocurrency firms. This comprehensive survey collects information on the anti-money laundering (AML) controls implemented by these firms.
The data obtained through REP-CRIM, along with other intelligence reports, allows the regulator to more effectively identify risks and adjust supervisory actions accordingly.
FCA’s cumbersome registration process
As of January 2020. The FCA serves as the AML regulator for UK cryptocurrency firms, such as exchanges and depositories. It has implemented a rigorous process for evaluating new registrations, uncovering major deficiencies in companies’ AML controls. This resulted in the withdrawal or rejection of many applications by the FCA.
The FCA’s March business plan highlights its commitment to protecting consumers and ensuring a fair cryptocurrency market. This includes a focus on strengthening its ability to identify and eliminate fraud in the cryptocurrency market over the next year. In addition, the FCA aims to promote a competitive UK financial sector in a global context.
Since tightening its oversight of financial promotions, the regulator removed a greater number of misleading ads last year compared to 2022.
This increased scrutiny is due to stricter advertising rules for high-risk investments, implemented in July 2023. The rules include detailed guidelines for companies to disclose key information about crypto products on various online platforms.
Further tightening controls, in March of this year the FCA issued new guidelines targeting financial promotions on social media. This includes formats such as memes, videos and even game broadcasts. The emphasis is on providing fair and accurate information, with no room for misleading content.
