The UK Treasury has released a new draft aiming to tighten anti-money laundering rules, with crypto firms directly in the spotlight. These proposals are meant to close loopholes that have made it easier for financial risk to go unnoticed. At the same time, the changes are being pitched as practical enough to let businesses keep running without too much disruption.
Tighter Oversight of Crypto Ownership and Control
One of the biggest changes targets how the Financial Conduct Authority looks at who controls a crypto firm. Right now, the focus is mainly on beneficial owners, which can miss people who actually call the shots. The updated rules expand that definition to include anyone with real authority and require them to meet a “fit and proper” standard. The threshold for reporting a change in control would also drop from 25 percent to 10 percent. That puts crypto firms on the same footing as others in the financial system and gives regulators a better chance to step in early if needed.
Stronger Checks on Banking Relationships
The proposals also take aim at how crypto firms work with correspondent banks, especially those overseas. These relationships are often the link between crypto businesses and traditional financial networks. The new rules would require crypto firms to do more thorough background checks on these banking partners and avoid working with shell banks altogether. This is meant to reduce the risk of money slipping through poorly regulated systems.
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More Precision in Customer Risk Checks
Customer due diligence is getting a more focused approach, too. Right now, firms often apply enhanced checks across the board just to be safe. The new rules suggest applying only those deeper checks when a transaction is unusually large or complex, or when it involves countries flagged as high risk. The idea is to let firms concentrate their resources where the risk is real, instead of burning time and money on low-risk situations.
Greater Transparency for Trusts
Trusts linked to crypto firms are also part of the update. The new rules would expand which types of trusts that need to register with the UK’s Trust Registration Service. At the same time, they would ease up on lower-risk setups, like small-value trusts or those used for estates. It’s a move toward better visibility without dragging simple arrangements into unnecessary paperwork.
Necessary Updates for Digital Practices
There’s also a practical switch in currency. Monetary thresholds are being updated from euros to pounds so they actually reflect how UK businesses operate. Alongside that, new guidance is expected to help firms with digital identity checks, which are becoming more common in compliance workflows.
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A Clear Timeline for Feedback and Action
The public has until the end of September to share feedback on the draft. Once that window closes, the rules are expected to head to Parliament early next year. If passed, new guidance will follow to help crypto businesses adjust to the updated framework.
Next Steps for the UK Crypto Scene
These changes show the UK is moving to treat crypto with the same seriousness as traditional finance. Stronger checks, more transparency, and clearer rules are all part of the direction regulators are heading in. Crypto firms will need to keep pace as the UK locks in a more structured approach to digital asset oversight.
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Key Takeaways
- The UK Treasury has proposed new anti-money laundering rules that specifically tighten oversight of crypto firms and their controllers.
- The definition of control will expand, and the reporting threshold for ownership changes will drop from 25% to 10%, giving regulators more visibility.
- Crypto firms will need to conduct stronger checks on correspondent banking relationships, especially with offshore or shell banks.
- Customer due diligence rules will become more targeted, focusing enhanced checks on high-risk countries or unusually large and complex transactions.
- Trust registration and identity checks will also be updated, with thresholds now set in pounds and new digital ID guidance to support compliance.
The post UK Proposes Stronger Anti-Money Laundering Rules for Crypto Firms appeared first on 99Bitcoins.
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