The UK’s latest three-year financial crime strategy unveiled on Thursday indicated that the Department of the Treasury and Home Office has plans to strengthen controls on money launderers and cryptocurrency thieves.
Objectives such as reducing fraud, limiting money laundering, recovering criminal assets, combating theft and reducing evasion of sanctions are outlined in the plan. The UK anticipates that future criminals will use unregulated cryptocurrency exchanges and services, requiring more coordinated enforcement action across countries.
The Financial Conduct Authority (FCA) has been working closely with international colleagues on a “bilateral basis” to exchange information.
UK regulators will leverage European and international measures to counter the threat of money laundering and related financial crimes, to ensure compliance with the EU’s Fifth Money Laundering Directive and FATF recommendations against money laundering.
Companies will be forced to tighten their controls, including those dealing in crypto-assets, and all related activities under the Fourth, Fifth and Sixth Anti-Money Laundering Directives. However, the report notes that it is still unknown to what extent these proposals will become reality.
The government is also working with other jurisdictions to develop the use of crypto-enforced sanctions, such as those recently seen in the United States against the sanctioned Venezuelan state-issued gasoline currency.
This would aim to replace traditional sanctions enforcement measures, such as asset freezes, with the use of blockchain technology, including smart contracts and distributed ledger technology.
What does this mean for the crypto industry?
The UK plans to demand an increase in blockchain transparency and accountability from companies, emphasizing the fight against illegal cryptocurrency activities.
- Greater accountability and transparency will be required from blockchain companies and organizations
- UK regulators plan to take advantage of European and international measures to fight money laundering and financial related crimes
- FATF recommendations against money laundering must be followed
- Crypto-enforced sanctions like those seen in the US may become more widespread
As part of their latest plan, the UK government is determined to take a global lead in the fight against cryptocurrency crime and to ensure the continued success of the crypto sector as well as increased consumer confidence.
The legal steps taken to create a safe, secure and accountable crypto-asset sector by regulators and governments worldwide could prove to be a major turning point for the future of Bitcoin and cryptocurrencies.
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