UK Crypto Firms Brace for Compliance as FCA Sets Deadline for ‘Travel Rule’ Implementation
- Starting September 1, crypto companies in the UK must provide information on transfers.
- Crypto firms have until August 25 to provide input on the new guidance.
The Financial Conduct Authority (FCA) has set out clear expectations for cryptocurrency businesses operating in the UK, outlining the necessary steps they must take to comply with the significant change in the legislation for money laundering prevention that was enacted in 2022.
According to a statement shared by the regulator today (Thursday), come September 1, 2023, cryptocurrency enterprises must comply with the Travel Rule, which necessitates the collection, verification, and sharing of important information pertaining to crypto asset transfers.
The Travel Rule
The Travel Rule emerged in response to the growing need for transparency and accountability within the realm of cryptocurrency transactions. By making it mandatory for crypto asset companies to share pertinent information about transfers, this new legislation seeks to curb the potential misuse of digital assets for illicit purposes.
Notably, the Financial Action Task Force (FATF) champions the adoption of the Travel Rule across jurisdictions, aiming to standardize crypto practices akin to the well-established rules in the broader financial services sector, the FCA stated. The rule promotes anti-money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and counter-terrorism financing measures.
As the implementation deadline draws near, UK cryptocurrency companies are bracing themselves for the changes that the Travel Rule will bring. The FCA has outlined a set of expectations that crypto asset firms need to adhere to, highlighting the importance of exercising due diligence and taking reasonable steps to ensure compliance.
Adapting Business Processes
Some of the major industry players have already paused their operations in response to the new regulations. Finance Magnates reported yesterday (Wednesday) that PayPal was temporarily suspending cryptocurrency sales for users in the UK for at least three months beginning October 1. In a statement addressed to its customers, the payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term giant emphasized commitment to compliance, assuring customers that they can still hold or sell their existing crypto holdings.
For instance, when sending or receiving crypto assets transfers within the UK or to jurisdictions that have embraced the Travel Rule, complete adherence becomes necessary, the FCA noted. However, in cases where transfers are made to jurisdictions that are yet to adopt the rule, companies are required to establish whether the recipient entity received the mandated information.
Additionally, in June, the FCA announced robust new rules for marketing cryptocurrencies in a bid to bolster consumer protection and foster informed decision-making within the industry. Effective from October 8, 2023, these rules encompass a range of measures, including the introduction of cooling-off periods for first-time crypto investors and a ban on ‘refer a friend’ bonuses.
The Financial Conduct Authority (FCA) has set out clear expectations for cryptocurrency businesses operating in the UK, outlining the necessary steps they must take to comply with the significant change in the legislation for money laundering prevention that was enacted in 2022.
According to a statement shared by the regulator today (Thursday), come September 1, 2023, cryptocurrency enterprises must comply with the Travel Rule, which necessitates the collection, verification, and sharing of important information pertaining to crypto asset transfers.
The Travel Rule
The Travel Rule emerged in response to the growing need for transparency and accountability within the realm of cryptocurrency transactions. By making it mandatory for crypto asset companies to share pertinent information about transfers, this new legislation seeks to curb the potential misuse of digital assets for illicit purposes.
Notably, the Financial Action Task Force (FATF) champions the adoption of the Travel Rule across jurisdictions, aiming to standardize crypto practices akin to the well-established rules in the broader financial services sector, the FCA stated. The rule promotes anti-money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and counter-terrorism financing measures.
As the implementation deadline draws near, UK cryptocurrency companies are bracing themselves for the changes that the Travel Rule will bring. The FCA has outlined a set of expectations that crypto asset firms need to adhere to, highlighting the importance of exercising due diligence and taking reasonable steps to ensure compliance.
Adapting Business Processes
Some of the major industry players have already paused their operations in response to the new regulations. Finance Magnates reported yesterday (Wednesday) that PayPal was temporarily suspending cryptocurrency sales for users in the UK for at least three months beginning October 1. In a statement addressed to its customers, the payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term giant emphasized commitment to compliance, assuring customers that they can still hold or sell their existing crypto holdings.
For instance, when sending or receiving crypto assets transfers within the UK or to jurisdictions that have embraced the Travel Rule, complete adherence becomes necessary, the FCA noted. However, in cases where transfers are made to jurisdictions that are yet to adopt the rule, companies are required to establish whether the recipient entity received the mandated information.
Additionally, in June, the FCA announced robust new rules for marketing cryptocurrencies in a bid to bolster consumer protection and foster informed decision-making within the industry. Effective from October 8, 2023, these rules encompass a range of measures, including the introduction of cooling-off periods for first-time crypto investors and a ban on ‘refer a friend’ bonuses.