Cryptoasset exchange providers and issuers in the UK, as well as custodian wallet providers, must register with the Financial Conduct Authority (FCA) to continue their activities. Since 10 January, the authority is their supervisor with regard to anti-money laundering and counter-terrorist financing compliance (AML/CTF).

The regulatory tightening comes through a recent amendment of the “MLRs”, short for the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Two categories of cryptoasset activities are targeted: firstly those of cryptoasset exchange providers – including cryptoasset automated teller machines (ATM), peer-to-peer provisions, and issuing of new cryptoassets such as initial coin offerings (ICO) or initial exchange offerings; and secondly custodian wallet providers.

The new rules, in force since 10 January, requires that existing businesses within the scope “ensure their compliance with the MLRs with immediate effect”. New businesses must register with the FCA before they may do any business. Existing businesses can continue throughout the year 2020 without being registered, but must apply for registration by June 2020 to be sure that the registration deadline of January 2021 is met. This also covers financial services and markets act firms, e-money institutions and payment services businesses who undertake cryptoasset activity

The news is summed up in an FCA release, which in turn suggests the reading of a dedicated page on the AML/CTF regime regarding cryptoassets.