Bitrabo Editorial
The UK’s financial regulatory body has reaffirmed its commitment to maintaining strict regulations regarding the registration of cryptocurrency businesses.
The Financial Conduct Authority (FCA) emphasized that stringent rules are essential in preventing these firms from facilitating money laundering activities.
Importance of Stringent Regulations
The FCA insisted on the importance of a rigorous registration process under the Money Laundering Regulations (MLRs), aimed at upholding the UK’s financial system’s integrity.
Val Smith, who leads the payments and digital assets division, stated that maintaining high standards is crucial to foster a vibrant cryptocurrency industry that prioritizes consumer protection and financial integrity.
Smith responded to concerns that these strict regulations might hinder the growth of the UK’s crypto sector.
Taking Money Laundering Seriously
Smith reiterated that the FCA’s primary goal is to prevent crypto firms from being used for money laundering, even if it results in fewer registrations.
“We never reject applications outright. However, we take the risk of money laundering very seriously. Letting illicit funds circulate unchecked can have devastating effects,” Smith stated.
He noted that the MLRs address significant issues in society, such as organized crime, terrorism, and human trafficking.
Ensuring Consistent Standards
According to Smith, loosening regulations that create “a race to the bottom” would not protect the public or the markets. He likened such rapid innovations to “houses built on sand,” which are bound to fail.
He expressed a desire for close collaboration with government entities, industry leaders, and global partners to foster a robust and trustworthy crypto sector.
“We can facilitate safety, security, and sustainable growth for the future by working together.”
Smith also highlighted the significance of establishing and sustaining standards that instill trust among the public.
“That’s why we require not only crypto companies but all businesses seeking registration to meet high and consistent standards.”
Since January 2020, the financial watchdog has mandated MLRs for businesses engaged in cryptocurrency, necessitating them to register with the FCA. These regulations include conducting risk assessments, implementing customer due diligence, and appointing a Money Laundering Reporting Officer.
Global Regulatory Trends
The move to regulate cryptocurrency is not unique to the UK; several other nations are adopting necessary measures for their crypto sectors.
For instance, the European Union has introduced the Markets in Crypto-Assets Regulation (MiCAR) to create a unified cryptocurrency market that safeguards consumers and maintains market integrity.
Alternatively, Singapore and Switzerland have embraced the crypto space by implementing friendly policies that nurture and encourage cryptocurrency startups.
Featured image from LAB51, chart from TradingView