27th November 2021

FCA seeks crypto forensics help amid AML registration backlog

Dr Henry Balani, Global head of Industry & Regulatory Affairs, for Encompass Corporation comments:

“Cryptocurrency and its involvement in financial crime has been a point of contention for a number of years. The decentralised nature of digital currency, while potentially demonstrating benefits, has also provided criminals with an ideal asset for criminal abuse. The benefits of digital currency includes stored value and anonymity. However, they transcends governmental and national oversight, and regulating it has been an uphill battle since its rise to mainstream popularity over the last decade.

“Globally, there is no agreed route to combatting financial crime through cryptocurrency and blockchain technology. China has implemented a complete ban, whereas countries such as El Salvador have embraced it as legal tender. In the UK, we have already seen mainstream banks cut ties to crypto trading platforms, and the FCA itself has introduced red tape measures in an effort to reduce financial crime within firms that work with cryptocurrency.

However, there is still a long way to go before cryptocurrency is no longer used as a vehicle for laundering money or enabling other forms of financial crime throughout the UK. The FCA has made a step in the right direction in enlisting third party expert services to weigh in on the issue, but this problem is so complex that it will require more than just the regulator to solve it. In fact, private financial services firms should take responsibility unto themselves to reduce financial crime, and essentially get ahead of the issue before the regulator forces them to. Advanced RegTech and third party advisory services, like those the FCA is looking to enlist, are all available options for private firms looking to help combat money laundering in the UK.”

Encompass Trends(29 articles)
FCA Trends(420 articles)