The UK’s latest three-year economic crime strategy unveiled on Thursday indicated that the Department for Treasury and Home Office have plans to strengthen the control of crypto-currency money launderers and thieves.
Targets such as reducing fraud, limiting money laundering, recovery of criminal assets, tackling theft and reducing sanctions avoidance have been outlined in the plan. The UK anticipates that future criminals will use unregulated crypto-currency exchanges and services, which requires greater coordinated enforcement actions between countries.
The Financial Conduct Authority (FCA) has been closely working with international peers on a “bilateral basis” to exchange information.
UK regulators will draw on European-wide and international measures to counter the threat from money laundering and related financial crimes, ensuring compliance with the EU’s Fifth Money Laundering Directive and the FATF anti-money laundering recommendations.
Businesses will be made to tighten up their controls, including those dealing in crypto assets, and all related activities within the scope of the Fourth, Fifth and Sixth Anti-Money Laundering Directives. The report notes, however, that the extent to which these proposals become reality remains unknown.
The government is also working co-operatively with other jurisdictions to develop the use of crypto-enforced sanctions, such as those recently seen in the US targeting the sanctioned Venezuelan state-issued petrol currency.
This would aim to replace traditional sanctions enforcement measures, such as freezing assets, with the use of blockchain technology, including smart contracts and distributed ledger technology.
What Does This Mean for the Crypto Industry?
The UK plans to demand an increase in blockchain transparency and accountability from businesses, putting an emphasis on the battle against illicit crypto-currency activities.
- Greater accountability and transparency will be required from blockchain companies and organisations
- UK regulators plan to draw on European and international measures to combat money laundering and financial-related crimes
- FATF anti-money laundering recommendations will have to be followed
- Crypto-enforced sanctions such as those seen in the US may become more widespread
As part of their lastest plan, the UK government is determined to take a global lead in the fight against cryptocurrency crime, and to ensure the continued success of the crypto sector as well as greater confidence from consumers.
The legal measures taken to create a safe, secure and responsible crypto-assets sector by regulators and governments worldwide could prove to be a major turning point for the future of Bitcoin and cryptocurrencies.