UK government announces ‘robust’ crypto regulation as part of financial crime plan
The UK government has made plans to step up the regulation of crypto assets in its efforts to respond to financial crime in the country.
In a policy document released on March 30, the UK Treasury and Home Office said it plans to “robustly” regulate crypto to combat illicit use of digital assets. The focus on regulation was part of the government’s economic crime plan from 2023 to 2026, which also included pooling the “knowledge and capabilities of law enforcement agencies” to review and strengthen how crypto assets involved in legal proceedings can be seized and stored.
“These steps will be in line with our ambition to make the UK an attractive destination for cryptoassets and cryptoasset innovation in the world,” the plan said. “Challenging as it is, effective regulation of cryptoassets benefits everyone, including consumers and firms.”
According to the policy document, the UK government said it expected criminals to move their crypto transactions to “less regulated exchanges and services” in other jurisdictions. The country’s Financial Conduct Authority, or FCA – one of the bodies behind the enforcement of crypto-asset regulation – will work with its international counterparts to exchange information related to the regulatory and supervisory response to crypto.
“The [National Crime Agency]’s National Assessment Center estimates that based on estimates of UK transaction volumes, illicit cryptoasset transactions linked to the UK in 2021 are likely to equal at least £1.24 billion (~1% of total transaction value) with a realistic possibility that they were significantly higher. “
As part of its action plan, the government said it planned to coordinate with various agencies to implement the Financial Action Task Force’s travel rule as well as pass the Financial Crime and Corporate Transparency Bill by the end of the fourth quarter of 2023. Other goals included improving communication between the FCA and crypto firms in second quarter 2024.
Related: The British Police Council reports that there are officers in every unit trained in crypto enforcement
As the UK looks to pursue a response to crypto on multiple fronts – from law enforcement to regulation – taxpayers in the country are facing their own reporting obligations. On March 15, the UK Treasury released a report announcing that it would change the self-assessment forms for crypto assets from the 2024-25 tax year.
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