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<p>Under the Money Laundering Regulations (MLRs), any firm operating as a cryptoasset
exchange provider or custodian wallet provider must be registered with the FCA for
anti-money laundering supervision as a cryptoasset business. It is the responsibility
of the FCA, as the independent supervisor for these firms, to assess whether firms
have appropriate anti-money laundering controls in place for the kinds of activity
they carry out, prior to admitting them to the register. There is no statutory exemption
to this requirement for firms that are already registered with the FCA for another
activity.</p><p> </p><p>It is necessary for firms dealing with cryptoassets to demonstrate
that their controls are adequate to deal with the specific nature of the cryptoasset
ecosystem. Having adequate AML controls for one type of business activity does not
guarantee that these controls are suitable for another.</p><p> </p><p>The government
is committed to supporting the safe and sustainable growth of the cryptoasset sector.
The MLRs established a risk-based approach to the supervision of cryptoasset businesses,
and the assessment which each firm must undergo should therefore be proportionate
to the risks generated by the kind of activities it engages in. The processes that
a broker is expected to put in place will therefore likely be different from those
that a large cryptoasset exchange is expected to demonstrate.</p><p><strong> </strong></p><p>
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