British politics are usually retrograde, which is no less true in the context of the crypto industry. The reverse policy means that the UK cryptosystem sometimes lags behind its competitors, which could ultimately make the UK a less attractive place to do cryptocurrency business.

Former CryptoUK President Iqbal Gandham, in an April letter to the British Parliament’s Treasury Committee, noted that while “the UK has great potential to become a global leader in cryptocurrencies, the lack of regulatory direction is stifling industry innovation.

In fact, it wasn’t until last year that the FCA published its final Crypto Asset Guidelines, and it was only this year that it was announced that prominent cryptocurrency-related businesses in the UK must register with the FCA and any new digital currencies. Companies created after this date will not be able to operate if they are not registered.

The new registration requirements were introduced following the recent changes to the 2017 money laundering, terrorist financing and remittance (payer information) regulations known as MLR. The explanatory note to the MLR rules states that the purpose of the legal instrument is to comply with the European Commission’s Anti-Money Laundering Directive, or AMLD, which states:

“Strengthen the effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other relevant threats to the integrity of the international financial system.”
The implementation of the new changes has resulted in the FCA being designated as the official regulatory body that monitors cryptoactivity and makes it responsible for realizing the MLR goal.

The obligation to register with the Financial Conduct Authority (FCA) seems like a positive step towards greater regulatory clarity in the UK, but what happens after registration? What can we learn from other jurisdictions?

Lessons from Japan?
Crypto companies that are required to register with the FCA must comply with a wide range of current obligations as described in the MLR. It is interesting to note, however, that reporting obligations under the instrument seem relatively vague – in contrast to Japanese legislation.

After Mt. The Gox Scandal In 2014, the Japanese government quickly drew up new regulations for the cryptocurrency industry. By 2017, the Payment Services Act, or PSA, had been amended not only to provide a legal definition of cryptocurrency, but also to fulfill legal obligations across all cryptocurrency exchanges.

The implementation of the new rules required cryptocurrency exchanges to be registered with a competent local financial office, which led to supervisory obligations by the Japan Financial Services Agency (FSA). According to the PSA, crypto companies are required to maintain financial records for all cryptocurrency transactions, and annual reports must be sent to the Financial Services Authority.

While the MLR seems a bit vague about the reporting rules of crypto companies, the impact of the new adjustments in theory should mean that companies involved in crypto activities can now be identified as FCA regulated entities. If this is the case, then it would be reasonable to assume that crypto companies registered with the FCA should follow the current broad guidelines available to FCA regulated companies, which include a requirement to submit an annual report on financial crimes to the FCA and a reporting obligation. suspicious activity. …

However, it is important to note that the key word here is “directive” and not a legal obligation. The guidance is usually open to interpretation and raises questions of regulatory clarity, especially regarding reporting obligations for crypto units in the UK.

Source: CoinTelegraph