FCA Proposes Crypto Crime Guidance On Wallet Checks And Blockchain Analytics

TL;DR: The FCA is consulting on updated financial crime guidance for crypto businesses, including customer checks, blockchain analytics and the Travel Rule. Responses are due December 24, and the guide itself would not create new rules. Crypto businesses preparing for the UK’s expanded regulatory regime have a more detailed picture of the controls the Financial Conduct Authority expects them to build. The regulator’s October 23 consultation proposes changes to its Financial Crime Guide, covering cryptoassets alongside fraud, sanctions, data security and money laundering. The proposals apply to the FCA’s financial crime supervisory population, including cryptoasset businesses and firms overseen under the Money Laundering Regulations. The practical focus is on how firms assess customers and transactions, and how they react when risk changes. A blockchain record can help an investigation, but a record alone does not decide whether a customer explanation is credible or a transfer needs further scrutiny. Analytics Must Sit Inside A Working Control System The consultation paper proposes examples of good and poor practice for enhanced due diligence, onboarding and transaction monitoring. ...