In the UK, cryptocurrency companies will be required to hand over customer information from September 1

22nd of August, 2023

The UK's Financial Conduct Authority (FCA) has issued new guidance on cryptocurrency transactions. The notice states that the deadline to start complying with the so-called "Travel Regulations" from FATF is September 1, 2023. From that date, UK cryptocurrency companies must collect, verify and exchange information on the transfer of cryptoassets.

Bringing UK legislation in line with FATF standards

The financial regulator FCA is serious about tackling the use of cryptocurrency for money laundering and other crimes and is introducing much tougher requirements for cryptocurrency companies.

The AML, CFT, KYC (Travel Regulations) Act was enacted in the summer of 2022 to implement the AML, CFT, KYC, in the UK. New measures making these rules mandatory will bring UK law in line with FATF standards.

FCA wants to stop money laundering through cryptoassets

The regulator aims to curb the high level of illicit financial activity in the cryptocurrency industry. To this end, the FCA has listed a number of recommendations for virtual asset service providers (VASPs). They should "take all reasonable steps and exercise due diligence in relation to compliance with the Travel Regulations, including by their customers".

Conducting international transactions

One of the recommendations relates to conducting cryptoasset transactions in jurisdictions where the Travel Regulations do not apply. In these cases, a UK firm that transfers cryptoassets on behalf of a client should determine the recipient's ability to engage in the collection and retention of the required information. In transactions where a UK cryptocurrency firm is the recipient, it should facilitate the collection of this data.

If incomplete information is received, this is a 'red flag'. In such cases, the FCA requires cryptofirms to conduct a risk assessment.

Some of the major players in the industry have already suspended their operations in response to the new rules. PayPal stopped selling cryptocurrency to users in the UK for at least three months starting October 1.

Crypto-businesses are required to keep reports, submitting them on time not only to the tax authority, but also to the financial regulator. Delays and errors in completing reports result in fines. This service sector requires professional accounting.

Many countries around the world have introduced regulation of cryptocurrency trading, exchange and investment services. This requires managers to be aware of the current legal framework. To ensure that your crypto business complies with international legislation and the requirements for regulation of crypto assets of individual countries, ask for crypto activity accounting support.

Sometimes independent record keeping and reporting may seem like a possible cost saving, but the help of professional accountants who have experience of working in the UK legal environment and know the pitfalls of this system will pay off in full. Our specialists accompany the entire process and provide turnkey services:

  • dive into the business case in detail;
  • study the client's needs;
  • familiarize in detail with the areas of activity;
  • support banking compliance;
  • prepare accounting and tax reports.

All this will keep your business safe from regulatory authorities and allow you to focus on attracting clients and making profits.