The UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), set out the high-level requirements on regulated entities to combat money laundering.

When the EU’s 5^th Anti-Money Laundering Directive (5MLD) was introduced in May 2018, the UK was required to transpose the requirements of 5MLD into domestic legislation, which included the expansion of the scope of the regulated sector. The UK completed the transposition of 5MLD in October 2020.

The MLRs are designed to detect and prevent money laundering and terrorist financing before it occurs, both directly through the UK’s financial institutions and through enablers who may be involved in transactions such as lawyers, accountants and estate agents. 5MLD expanded the threshold for firms and sole practitioners who are regulated under the MLRs, and therefore required to register for anti-money laundering supervision, to include: letting agents, art market participants, cryptoasset firms, and tax providers. The government consulted in 2019 on how best to include these sectors within the UK’s anti-money laundering and counter-terrorist financing regime, seeking to ensure that the regime effectively deters money laundering and terrorist financing activity, whilst being proportionate and managing burdens on businesses and legitimate customers.

The UK is a global leader in the push towards greater tax transparency, driving forwards cooperation between jurisdictions to help to tackle tax evasion by making it harder to hide offshore financial assets. HMRC has a strong record in tackling offshore non-compliance, whether stopping this through leading international activity, providing easy ways for people to disclose correctly their tax affairs, or by acting against those who are trying to deliberately cheat the public.

The government believes that having an effective anti-money laundering and counter-terrorist financing regime goes hand-in-hand with supporting British fintech firms and consumers by providing confidence that new technologies can be used both reliably and safely. The scope of the UK’s anti-money laundering registration regime for cryptoassets is based on international standards agreed at the Financial Action Task Force (FATF). This applies to cryptoassets regardless of whether they are intended to function as a medium of exchange or as an investment. As the Kalifa review noted, the UK has a hard-won reputation of trust regarding regulation and the rule of law which we must build on. The government supports the FCA’s approach to establishing the regime, which will provide the confidence needed to support genuine innovation in the cryptoassets sector.

Whilst it is open to UK cryptoasset firms to relocate to another jurisdiction, most major financial centres worldwide are in FATF member jurisdictions, which are expected to implement AML standards for cryptoasset firms that are broadly in line with those in the UK. Firms based overseas that do not carry on their cryptoasset business in the UK may still interact with UK consumers. The government launched a consultation on its regulatory approach to cryptoassets and stablecoins on 7 January and will outline next steps in due course. The FCA’s consumer protection objective applies where the FCA is discharging one of its general objectives under the Financial Services and Markets Act 2000, and does not apply with regard to functions conferred under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs).

Under the MLRs, firms are expected to assess money laundering and terrorist financing risks when considering the services they provide to current or potential customers. The ultimate decision about whether to provide services to a customer belongs to the bank, which may take into account commercial considerations in addition to financial crime risks.

To comply with the MLRs, cryptoasset firms must demonstrate systems, controls, policies and procedures adequate to deal with the particular risks of the cryptoasset market. That a firm is already permitted to carry out activities in one area therefore does not mean it meets the required standards for another area. It is therefore necessary for a firm to apply to be registered for its cryptoasset activities, even though it has already registered with the FCA for AML supervision related to other activities.

No estimate has been made on the potential value of capital gains tax (CGT) that are due on gains from cryptoassets held as investments or any tax liabilities arising from decentralised finance (also known as DeFi). The self-assessment form does not currently separate capital gains made on cryptoassets from other assets. As a result, a reliable estimate for CGT due from cryptoassets would only be available at a disproportionate cost.

The recently released cryptoassets manual, one the most detailed publications from any tax administration, explains the tax consequences of different types of transactions involving cryptoassets for both business accepting them as well as individuals using them. HMRC has taken action, including using powers provided by Parliament to gather data, to identify and investigate those that have failed to declare their tax liabilities.

Regarding the possible merits of a sterling-based stablecoin, I refer the Honourable Gentleman to the answer given to PQ UIN 37102.

On the issue of money supply, Bitcoin trading or decentralised finance will need to become a significant source of lending to the real economy in the UK before they have a notable impact on money supply measurements.

Regarding the Financial Conduct Authority (FCA) and the Prudential Regulation Authority’s (PRA) role with respect to decentralised finance, I refer the Honourable Gentleman to the answer given to PQ UIN 37103.

With regards to the FCA’s cryptoasset derivatives ban for retail consumers, the FCA stated that it found these products to be ill-suited for retail consumers due to potential harms, including the high risk of suffering losses. The FCA has noted that it will keep this prohibition under review. The FCA is an independent body and its decision to take the ban forward after consultation is based on powers granted to the FCA under statute, pursuant to the FCA’s objectives which include protecting consumers, enhancing market integrity and promoting competition.

Regarding the possible merits of the FCA restricting UK banks’ access to decentralised finance, the FCA is an independent regulator, and considers the risks of banks engaging in decentralised finance as one of the many risks it considers. Most decentralised finance activities are not regulated in the UK. Accordingly, the Government does not have accurate information on the number of entities operating in the UK in comparison to the EU and the US.

On the issue of clearing, the EU has granted a temporary equivalence decision to UK Central Counterparties (CCPs) which lasts until June 2022.

Therefore, without any further action by EU authorities, certain UK CCPs may need to begin offboarding EU clearing members by the end of March 2022 in order to be ready for equivalence expiring in June 2022.

However, letting equivalence expire in June next year would raise the cost of clearing for firms, particularly EU ones, and present significant financial stability risks. The Government therefore hopes that equivalence would not be allowed to expire in June 2022. As it stands, the Government has seen limited evidence of activity moving.

The FCA’s competition objective, as set out in section 1E of the Financial Services and Market Act 2000 (FSMA), requires the FCA to promote effective competition in the interests of consumers in markets for regulated financial services. Activities relating to cryptoassets do not constitute regulated financial services, except where a cryptoasset qualifies as a Specified Investment under the Regulated Activities Order or is e-Money. The FCA’s competition objective therefore does not apply with respect to most markets for cryptoassets. Where a cryptoasset is a Specified Investment or e-Money, the cryptoasset business should already have been registered with the FCA for anti-money laundering supervision, independently of the new supervisory regime for cryptoasset businesses.

The FCA’s decision to extend the Temporary Registration Regime for cryptoasset businesses to 31 March 2022 will allow firms that are currently on the temporary register to continue operating whilst their applications are assessed, and preserve consumers’ access to a range of cryptoasset firms in the intervening period. This strikes an appropriate balance between mitigating the risk of money laundering in the cryptoasset sector, and ensuring that cryptoasset businesses based in the UK, and the customers they serve, are not subject to undue disruption.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.

Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.

The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.

The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.

The UK is committed to having a robust AML regime for cryptoassets which will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.

On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. Due to the complexity and standard of applications received, the FCA was not able to process and register all applications by the 10 January 2021 deadline. A significant number of firms have failed to implement appropriately robust AML control frameworks, and to employ fit and proper personnel.

On 16 December 2020 the FCA announced that it was establishing a ‘Temporary Registration Regime’, under which relevant firms are eligible to continue trading pending a decision. This is due to expire on 9 July 2021.

As of 24 May 2021, 5 cryptoasset businesses have received registration from the FCA since 10 January 2020. Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 cryptoasset businesses with outstanding applications for AML/CTF registration with the FCA. 77 new cryptoasset businesses have applications pending full assessment.

On 7 January HM Treasury published a consultation on the broader regulatory treatment of cryptoassets, with a focus on cryptoassets known as stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This consultation has now closed. The government is processing responses and will outline next steps in due course. Any future regulatory regime for cryptoassets  set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.

HM Treasury officials are in regular contact with the FCA, as well as individual firms, industry groups and associations and consumer facing organisations to listen to their concerns on the full range of financial services related issues including cryptoassets.

The UK is committed to having a robust AML regime for cryptoassets which will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.

On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. Due to the complexity and standard of applications received, the FCA was not able to process and register all applications by the 10 January 2021 deadline. A significant number of firms have failed to implement appropriately robust AML control frameworks, and to employ fit and proper personnel.

On 16 December 2020 the FCA announced that it was establishing a ‘Temporary Registration Regime’, under which relevant firms are eligible to continue trading pending a decision. This is due to expire on 9 July 2021.

As of 24 May 2021, 5 cryptoasset businesses have received registration from the FCA since 10 January 2020. Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 cryptoasset businesses with outstanding applications for AML/CTF registration with the FCA. 77 new cryptoasset businesses have applications pending full assessment.

On 7 January HM Treasury published a consultation on the broader regulatory treatment of cryptoassets, with a focus on cryptoassets known as stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This consultation has now closed. The government is processing responses and will outline next steps in due course. Any future regulatory regime for cryptoassets  set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.

HM Treasury officials are in regular contact with the FCA, as well as individual firms, industry groups and associations and consumer facing organisations to listen to their concerns on the full range of financial services related issues including cryptoassets.

The UK is committed to having a robust AML regime for cryptoassets which will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.

On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. Due to the complexity and standard of applications received, the FCA was not able to process and register all applications by the 10 January 2021 deadline. A significant number of firms have failed to implement appropriately robust AML control frameworks, and to employ fit and proper personnel.

On 16 December 2020 the FCA announced that it was establishing a ‘Temporary Registration Regime’, under which relevant firms are eligible to continue trading pending a decision. This is due to expire on 9 July 2021.

As of 24 May 2021, 5 cryptoasset businesses have received registration from the FCA since 10 January 2020. Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 cryptoasset businesses with outstanding applications for AML/CTF registration with the FCA. 77 new cryptoasset businesses have applications pending full assessment.

On 7 January HM Treasury published a consultation on the broader regulatory treatment of cryptoassets, with a focus on cryptoassets known as stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This consultation has now closed. The government is processing responses and will outline next steps in due course. Any future regulatory regime for cryptoassets  set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.

HM Treasury officials are in regular contact with the FCA, as well as individual firms, industry groups and associations and consumer facing organisations to listen to their concerns on the full range of financial services related issues including cryptoassets.

The UK is committed to having a robust AML regime for cryptoassets which will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.

On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. Due to the complexity and standard of applications received, the FCA was not able to process and register all applications by the 10 January 2021 deadline. A significant number of firms have failed to implement appropriately robust AML control frameworks, and to employ fit and proper personnel.

On 16 December 2020 the FCA announced that it was establishing a ‘Temporary Registration Regime’, under which relevant firms are eligible to continue trading pending a decision. This is due to expire on 9 July 2021.

As of 24 May 2021, 5 cryptoasset businesses have received registration from the FCA since 10 January 2020. Of the firms assessed to date over 90% have withdrawn their application following FCA intervention. There are 167 cryptoasset businesses with outstanding applications for AML/CTF registration with the FCA. 77 new cryptoasset businesses have applications pending full assessment.

On 7 January HM Treasury published a consultation on the broader regulatory treatment of cryptoassets, with a focus on cryptoassets known as stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This consultation has now closed. The government is processing responses and will outline next steps in due course. Any future regulatory regime for cryptoassets  set out by the Government in light of this consultation will aim to balance the potential risk to consumers with the ambition to stimulate competition and innovation in the industry.

HM Treasury officials are in regular contact with the FCA, as well as individual firms, industry groups and associations and consumer facing organisations to listen to their concerns on the full range of financial services related issues including cryptoassets.