U.K. Crypto Firms Seek Guidance on Anti-Money Laundering Rule Implementation

U.K. Crypto Firms Seek Guidance on Anti-Money Laundering Rule Compliance

U.K. crypto firms have just days to comply with new anti-money laundering requirements, but the patchy implementation of the FATF rule globally is making it difficult for service providers to comply. The rule requires firms to identify the names of people behind transactions, which has been controversial in the crypto industry. Only 35 jurisdictions have passed the required legislation, leading to a lack of harmonization.

Main Points:

The international standard setter FATF has set norms for identifying individuals behind transactions, but adapting them to crypto’s unique features has been challenging.
The requirement to gather data on overseas interactions poses challenges for crypto firms.
Regulators have been slow to provide guidance, leaving industry players with many questions.
Lobby groups are calling for a standardized approach to the travel rule across jurisdictions.
The implementation of the rule varies between jurisdictions, and some laws have not yet taken effect.

CryptoUK is turning to the Joint Money Laundering Steering Group to call for more details and guidance. However, with the rules taking effect soon, there is hope for leeway from the regulator while firms tackle compliance issues. The Financial Conduct Authority has emphasized the importance of compliance and may not go easy on non-compliant businesses.

Hot Take:

The implementation of the travel rule in the crypto industry poses challenges due to the lack of global harmonization and slow regulatory guidance. While there is a need to combat money laundering, it is crucial to find a balance between compliance and the unique features of the crypto industry. The industry would benefit from standardized approaches and clearer guidance to ensure a level playing field and effective anti-money laundering measures.