According to the top financial regulator in the United Kingdom, crypto firms are among the businesses most at risk of being used for money laundering. The U.K. Treasury, using data provided by the Financial Conduct Authority (FCA), stated in a report on May 1 that crypto-asset companies, along with retail banking, wholesale banking, and wealth management companies, were particularly vulnerable to financial crime, specifically money laundering, between 2022 and 2023.
The report revealed that during this period, there were a total of 52.8 full-time specialists responsible for overseeing Anti-Money Laundering cases, with nearly one-third specifically focused on supervising crypto firms. In addition, the FCA’s financial crime specialists conducted a total of 231 reviews of financial firms operating in the U.K. and investigated an additional 375 cases related to financial crimes and sanctions.
As part of their supervisory efforts, the FCA teams launched 95 cases into British crypto companies. The U.K. government has been working on implementing clearer legislation for local crypto firms, with the U.K. Treasury announcing on April 16 its intention to present a comprehensive regulatory framework for crypto assets and stablecoins by July.
Furthermore, on April 26, the U.K. National Crime Agency (NCA) and police were granted expanded authority to seize, freeze, and destroy cryptocurrency used by criminals. Under the new rules, police no longer need to make an arrest before confiscating crypto holdings. They can also seize items like passwords and memory sticks that could aid investigations, and have the power to remove crypto assets from circulation if it is deemed detrimental to the public good, typically by “burning” the asset. Additionally, U.K. police can transfer seized illicit cryptocurrency to wallets under their control, and crime victims can apply to reclaim funds from their crypto accounts.
In summary, the United Kingdom recognizes the vulnerability of crypto firms to money laundering and is taking steps to regulate the industry and strengthen enforcement against financial crimes.