UK crypto firms are all set to be under the purview of FATF travel rules from September, with better protocols for preventing illegal activities.
The UK is again in the news, for all the good reasons of its crypto industry. According to the Financial Conduct Authority (FCA) press release, UK crypto firms would start following the FATF travel rules. The implementation will come into effect from September 2023.
The Financial Action Task Force (FATF) is a global body that deals with making policies. These FATF policies and rules help prevent illegal practices such as money laundering and funding for terrorism.
The FATF travel rules deal with virtual asset service providers. It was initially meant for financial firms but later extended to the crypto industry. The rules aim to prevent criminals from using crypto assets to finance their activities.
The FCA’s press release shares details on what procedures crypto firms in the UK need to undertake. The regulator expected all firms to comply with the rules while making crypto asset transfers within the UK.
Crypto businesses also had to identify the rules’ implementation in other jurisdictions while sending money to them. It also has to store all transaction information while making a crypto transfer to non-compliant areas.
Regarding receiving money, the FCA said, “The UK cryptoasset business should take these factors into account when making a risk-based assessment of whether to make the crypto assets available to the beneficiary.” It referred to crypto firms storing information about the sender and the transaction while receiving crypto assets.
The UK has had various developments in the last few months regarding crypto. The Bank of England has made considerable progress in terms of stablecoins. It started the CBDC design phase of the digital pound, inviting experts to form an advisory group.
The government also allotted more powers to the central bank in regulating stablecoins. The Bank of England has, thus, assumed more responsibilities than the FCA for stablecoin regulation.
Europe, meanwhile, has seen vast progress in crypto. It saw its first spot Bitcoin ETF debuting at the Euronext Amsterdam exchange. The move has made the European Union go ahead of the United States for crypto ETFs. The United States has seen several ETF applications, but they have yet to receive the green signal.
But, the Securities and Exchange Commission (SEC) made headlines in the last 24 hours with a positive sign. If reports are to be believed, the SEC could approve the country’s first Ethereum ETF this year.
Such ETFs around the world could make a profound positive impact on crypto. Firstly, it could ensure capital inflows continue in the market steadily. Secondly, it could help new crypto investors get started quickly without direct subjection to the market.