May 23, 2024
Latest Cryptocurrency News

FCA Warns on Anti-Money Laundering Risks in Crypto Sector

In its latest report on anti-money laundering and counter-terrorist financing, experts have pointed out that cryptocurrency, banking, and asset management sectors posed the highest risks associated with illicit financial activities from 2022 to 2023.

FCA Scrutinizes Crypto Firms

The document, titled “Anti-money laundering and counter-terrorist financing,” revealed that the U.K. Financial Conduct Authority (FCA) deployed over 50 financial crime specialists to examine the operations of 238 firms during the specified period. Notably, approximately one-third of these specialists focused on monitoring crypto-related activities.

According to the report, the FCA adopted a risk-based approach, conducting rigorous assessments at the registration gateway for crypto businesses.

Moreover, this process unearthed significant weaknesses in firms’ controls, leading to a substantial number of withdrawals, rejections, or refusals by the FCA.

Watchdog Groups Open Hundreds of Financial Crime Cases

Outside the core FCA staff, other regulatory bodies initiated 375 additional cases related to financial crime. Specifically, 95 investigations targeted cryptocurrencies.

Furthermore, in October 2023, the FCA publicly criticized crypto companies for noncompliance with new marketing regulations. The regulator issued 221 non-compliance warnings and identified three common shortcomings among these firms. It also pledged to take decisive action against those failing to adhere to regulatory standards.

This announcement closely followed the implementation of the U.K.’s stringent crypto firm marketing regime, which mandates that advertising by such entities must be transparent, equitable, and non-misleading.

As authorities intensify their scrutiny, the crypto industry faces mounting pressure to enhance compliance measures and curb illicit activities.

Image by on Freepik

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