Bitcoin and the rest of the crypto-market have noted a startling rise on the price charts over the past year, with the scale of its gains capturing the attention of public and institutional investors alike. This has been an interesting development, especially since cryptocurrencies have often been the boogeymen for traditional financial authorities, with the latter often advising caution when dealing with this asset class.
In fact, the financial watchdog of the United Kingdom, the Financial Conduct Authority [FCA], famously released a warning for consumers about the investment risk in cryptocurrencies.
Following the amendments made to the consultations by the FCA last year, the regulatory board today published its final policy requirements. According to the same, the number of firms required to submit a REP-CRIM has risen from approximately 2,500 to approximately 7,000. It proposed that additional firms and crypto-asset businesses be brought into the scope of the same based on their business activities and potential money laundering risks.
With respect to the new policy, the following additional firms are required to supply the board with REP-CRIM information, irrespective of their total annual revenue,
- Banks
- Building Societies
- Businesses undertaking MiFID related activities
- Crypto-asset businesses
On the contrary, there are two omissions in the new strategy since they were considered to be outside the scope of the MLRs.
This extension doesn’t come as a surprise, however, as described by the 2020/21 Business Plan, where the FCA suggested that it will be considering the extension of REP-CRIM reporting obligation to more firms.
Considering the next steps, firms brought into the scope of REP-CRIM for the first time will need to be prepared to submit their returns, whenever it is due.
Here, it should be noted that it was back in July 2016 when the FCA introduced annual financial crime reporting obligations for certain firms, obligations which were collectively referred to as ‘REP-CRIM.’
What’s more, back in August 2020, the FCA consulted on increasing the number of firms that would be required to submit these returns. At the time, it had proposed that crypto-asset businesses and many firms that were not previously included be brought into the scope of the returns, based on their business activities and the potential money laundering risks.
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