The UK Financial Regulatory Authority is standing by its decision to continue introducing strict rules for the registration process for companies involved in cryptocurrencies.
The Financial Conduct Authority (FCA) has argued that the UK’s strict regulations on crypto companies act as a deterrent to prevent them from becoming conduits for money laundering activities.
strict rules needed
The FCA supports a rigorous registration process under the Money Laundering Regulations (MLR), stressing that regulation is essential to safeguarding the integrity of the UK financial system.
Val Smith, head of payments and digital assets in the FCA’s licensing division, said in a statement that the standard protects people and the health of financial markets, and provides the foundation for a competitive and prosperous cryptocurrency sector.
Smith defended the MLR from critics who argue that strict regulations could stifle the growth of the UK crypto sector.
Take money laundering seriously
Smith said regulators aim to ensure that crypto companies do not become conduits for money laundering activities, even if this results in fewer crypto businesses being registered.
“We never reject applications out of hand. However, we treat the risk of companies being used for money laundering very seriously. Allowing illicit funds to flow freely That can destroy people’s lives,” Smith said.
He added that MLR requirements will help address “real-world problems” such as organized crime, terrorism and human trafficking.
maintain universal standards
Smith explained that relaxing government standards for registering crypto companies, which creates a “race to the bottom,” does not guarantee the protection of the public and the market, adding that it is “insecure, unregulated and “Innovation built quickly on untrusted foundations” is like building a house on sand that will eventually crumble.
He said the regulator wants to work closely with government, industry and other cross-jurisdictional partners to develop a crypto sector that is reliable and built on a solid foundation. Ta.
“Doing this will ensure safe, secure and sustainable growth for years to come.”
Image: British Guild of Tourist Guides
She pointed out that a key part of the competitive cryptocurrency sector is setting and maintaining standards that people can trust.
“That’s why we hold strong and universal standards to not only crypto companies, but all companies seeking to register.”
The financial watchdog introduced the MLR in January 2020, requiring companies involved in virtual currency-related activities to register their business with the FCA.
MLR required these companies to carry out a risk assessment. They must also carry out customer due diligence and appoint a money laundering reporting officer.
Britain is not alone
Regulation of cryptocurrency-related activities is not unique to the UK. Other countries are also taking necessary steps towards the crypto sector.
A good example is the European Union. The regional bloc has developed the Cryptoassets Market Regulation (MiCAR) with the aim of establishing a single cryptocurrency market that guarantees consumer protection and market integrity.
Meanwhile, Singapore and Switzerland have also become crypto-friendly hubs after introducing policies to promote and nurture crypto startups.
Featured image from LAB51, chart from TradingView
