New Survey Raises Concerns over Crypto Firms’ Customer Verification
New survey data from SmartSearch reveals that most cryptocurrency firms are not effectively verifying their customers. Only 17% of crypto firms consistently verify new customers, and half of them admit to conducting such checks only sporadically. The survey, conducted by digital compliance firm SmartSearch, included 500 UK compliance decision-makers and covered various industries. The data also showed that 42% of over-the-counter traders and 52% of crypto exchanges have adjusted their compliance procedures since the imposition of sanctions on Russia. However, critics argue that these measures are still not enough, and businesses risk breaking the law. The Financial Conduct Authority and law enforcement have been increasing their efforts to prevent sanctions evasion in the crypto space.
Crypto Firms’ Lack of Compliance
- Only 17% of crypto firms consistently verify new customers
- Half of the firms conduct customer verification checks sporadically
- 42% of over-the-counter traders have adjusted compliance procedures post-sanctions
- 52% of crypto exchanges have adopted additional measures
- Increased efforts by regulators to prevent sanctions evasion in the crypto space
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NCA Steps Up Enforcement of Crypto-Related Crime
The National Crime Agency (NCA) in the UK has been ramping up its enforcement of crypto-related crimes. The agency recently announced the hiring of personnel for a new role, Digital Assets Disclosure Officer, to investigate crypto crimes. The UK has been grappling with the challenges of identifying individuals behind crypto transactions, and in 2020, it passed the updated Money Laundering and Terrorist Finance Act to strengthen regulations in this area. A previous survey by SmartSearch also highlighted the growing problem of money laundering in the crypto industry, with 28% of firms reporting an increase in Suspicious Activity Reports.
Hot Take
The survey data from SmartSearch raises concerns about the lack of commitment to effective customer verification practices among crypto firms. With only 17% consistently verifying new customers, and half of the firms conducting checks sporadically, there is a need for stricter compliance measures. The increased efforts by regulators and law enforcement to prevent sanctions evasion in the crypto space show the seriousness of the issue. The NCA’s hiring of personnel dedicated to investigating crypto crimes further highlights the need for stronger enforcement. It is crucial for crypto businesses to prioritize compliance and avoid the risk of facing fines or legal consequences.
