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New Cryptoassets Regime Starts 2020

New Cryptoassets Regime Starts on 10th January 2020

16 December 2019

With the new year fast approaching, Firms that carry on cryptoassets activities should be reminded of the need to register with the FCA next year. From 10 January 2020, the FCA will be registering and supervising businesses that carry on cryptoasset activities to ensure that these businesses have the required systems and controls to prevent money laundering and counter terrorist financing.

The FCA’s recent consultation on fees, set out the fees the regulator will look to charge cryptoasset businesses, with feedback on the consultation expected in the FCA’s January Handbook Notice.

From 10th January 2020, Cryptoasset Businesses will have to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).

Such businesses can also find additional information on the FCA’s dedicated cryptoassets webpage on the regulator’s website, which is where the industry watchdog will look to share their approach and expectations for this sector with the industry.

Whilst Firms currently undertaking cryptoassets business have 1 year until 10 January 2021 to become registered with the FCA, they should be reminded that regardless of whether they have registered with the FCA, the FCA will be able to take enforcement action from next year’s implementation date of 10th January 2020.

All existing cryptoassets businesses should ensure their applications to the FCA are received by 30 June 2020 in order to be registered before the deadline, however for businesses looking to start cryptoassets activities within the year, they will need to register with the FCA before they can carry out the activity.

What should Cryptoasset Businesses do now?

Cryptoasset Businesses will need to ensure they are prepared for when the registration process starts and will also need to prepare suitable AML and CTF policies and procedures before completing and submitting their applications for FCA registration.

These business should also prepare themselves for a greater level of scrutiny going forward, particularly in relation to their AML/CTF processes and policies.

It would be advisable for existing Cryptoasset Businesses to start preparing their applications ready for submission sooner next year rather than later to ensure that the business can continue to function without any delay, since firms will not be able to operate until approval has been granted once the deadline has passed.

If you believe your business will be affected by the new regulations and would like any support or assistance in preparing your AML/CTF policies and procedures or your application for the FCA we would be pleased to support you. Simply drop us a line and we would be happy to discuss how we can help.

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