The UK has introduced draft proposals aimed at tightening anti-money laundering and counter-terrorist financing regulations in the crypto sector. These changes focus on improving oversight and transparency.
Key Changes in Crypto Oversight
The suggested changes will significantly impact cryptocurrency businesses, as new ownership requirements for companies are being introduced. The UK's Financial Conduct Authority (FCA) is set to increase the 'fit and proper person' test for firm controllers, replacing the existing beneficial ownership requirement. The reform aims to elevate scrutiny and transparency in crypto companies.
Impact on the UK’s Competitiveness
The proposed regulatory reforms raise doubts about the UK's competitiveness in the international crypto market. Stricter regulations may push crypto firms to seek friendlier jurisdictions elsewhere, placing the UK at a crossroads between credibility and maintaining its competitive edge.
Feedback and Next Steps
The UK Treasury is inviting public feedback on the draft proposals until September 30. After considering the responses, the government plans to finalize regulations for Parliamentary review in early 2026. This process will shape the regulatory environment for crypto businesses in the future.
The proposed changes to the UK’s crypto regulations highlight the need for a balance between combating financial crime and fostering innovation in the financial sector.
