The UK Financial Conduct Authority (FCA) issued a letter urging bank executives to follow certain recommendations to reduce the risk of financial crimes related to cryptocurrencies.
The FCA recommends strengthening the control of clients who "derive significant business activities or revenues from crypto-related activities". It is both about crypto exchanges, individuals, and companies.
The recommended FCA measures include conducting a “due diligence on key individuals in the client business including consideration of any adverse intelligence "and engaging with clients “to understand the nature of their businesses and the risks they pose.”
FCA also called on banks to raise awareness of employees in the cryptocurrency area in order to "identify the clients or activities which pose a high risk of financial crime.” Thus, the regulator proposed a number of measures that banks should take to minimize risks from customers using cryptocurrencies for criminal purposes.
It is noteworthy that the FCA recommends that banks show increased attention not to all clients associated with cryptocurrencies, but only to certain categories. As explained in the agency, a high risk indicator may be the purchase of state-owned cryptocurrencies, which are designed to bypass international sanctions such as the Venezuelan El Petro. In addition, banks should pay attention to customers investing large amounts into the ICO.
In March, it was reported that the government of Great Britain together with the regulators were carefully studying the issue of potential risks associated with cryptocurrencies. As experts say, it is unlikely that the UK will decide to impose strict regulation as it wants to remain the fintech-center of Europe.
By Ekaterina Ulyanova