UK government identifies crypto firms as significant money laundering risks in 2022-2023.

The United Kingdom’s top financial regulator has identified crypto firms as being at high risk of being exploited for money laundering. According to a report released by the U.K. Treasury on May 1, data from the Financial Conduct Authority (FCA) revealed that crypto-asset companies were among the four types of firms most vulnerable to financial crime, particularly money laundering, between 2022 and 2023. Retail banking, wholesale banking, and wealth management companies were also listed as being at risk. The report highlighted that during this period, there were 52.8 full-time specialist employees dedicated to overseeing Anti-Money Laundering cases, with nearly one-third of them focused on supervising crypto firms. The FCA’s financial crime specialists conducted 231 reviews of U.K.-based financial firms and an additional 375 cases related to financial crimes and sanctions. As part of their supervisory efforts, FCA teams launched 95 cases against British crypto companies. The U.K. has been working towards introducing clearer legislation for local crypto firms and aims to present a full regulatory framework for crypto assets and stablecoins by July. Furthermore, the U.K. National Crime Agency (NCA) and police have been granted expanded authority to seize and destroy cryptocurrency used by criminals. Under the new rules, law enforcement can seize items such as passwords and memory sticks that may aid investigations. They also have the power to remove crypto assets from circulation, typically by burning them, if it is deemed necessary for the public good. Additionally, U.K. police can transfer seized illicit cryptocurrency to wallets under their control, and crime victims have the opportunity to reclaim funds from their crypto accounts.