In a previous blog, we discussed the FCA’s first criminal charges against an individual for alleged offences of running multiple crypto ATMs without FCA registration.
The FCA charged the individual with operating, without FCA registration, a network of crypto ATMs which had processed millions in crypto transactions within two years.
This marked the first attempted FCA prosecution against an individual relating to unregistered cryptoasset activity under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Update
On 30 September 2024, it was reported that the individual pleaded guilty to illegally operating a network of crypto ATMs without FCA registration. These machines were likely used for money laundering and tax evasion offences.
What are the FCA registration requirements for cryptoassets?
UK anti-money laundering (AML) regulations can apply to UK crypto firms that provide exchange or custodian services for cryptoassets (e.g. a crypto ATM).
This is on the basis that the UK Government has transposed AML requirements relating to cryptoassets into national law.
A UK business providing the services of exchange and/or custody for cryptoassets will be subject to AML regulations. The AML regulations appoint the FCA as the supervisor of cryptoasset businesses for AML purposes, and businesses within scope will need to register with the FCA and comply with all regulatory requirements.
New powers for the seizure and recovery of cryptoassets
On 20 June 2024, we discussed how the FCA and London police arrested two people in connection with an alleged illegal cryptocurrency exchange worth more than £1 billion. The arrest followed searches of two properties.
The arrests came at a time UK authorities had been granted new powers in relation to the seizure and confiscation of cryptoassets. However, it is unclear whether these were used.
We have detailed these new powers in a series of articles:
Can UK law enforcement seize cryptoassets? – Gherson LLP
This is not the only big news this year relating to the investigations of crimes in connection with cryptoassets. On 20 March 2024, it was reported that the Crown Prosecution Service (CPS) had obtained the conviction of an individual for offences relating to money laundering. This followed the largest seizure by UK authorities of the cryptocurrency bitcoin.
Criminal investigations and litigation
Gherson’s criminal litigation, regulatory and investigations team combine an expert knowledge of criminal and regulatory law underpinned with a firm understanding of cryptoassets and blockchain technology. The team is able to provide expert advice to who are concerned they may be the victim of cryptoasset theft.
Cryptoasset regulation and compliance
In these constantly changing times, firms that deal with cryptoassets, and additionally have exposure to firms that do, will need to carefully consider all their systems and controls to ensure that they are able to comply with all relevant AML and sanctions regulations. Gherson’s white-collar crime and regulatory team are able to provide advice and assistance with AML and sanctions compliance, including in situations involving cryptoassets.
Additionally, the team has recently started a series on the regulation of crypto, with the aim of advising those who work in the compliance of this sector. In addition, for those who would like advice on relevant issues, including those who have had issues with the FCA registration process, our specialist regulatory and compliance team can guide individuals and companies through the process.
Please do not hesitate to contact us for further advice, send us an e-mail, or alternatively, follow us on Twitter or LinkedIn to stay up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2024