Application for Cryptoassets business registration in UK under MLRs – Part I

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The FCA has been the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor of UK cryptoasset businesses since 10 January 2020.

 The FCA received a total of 368 applications for registration since January 2020, only 50 applications have successfully registered as at  9 February 2025. Therefore, a high proportion of the applicants either withdrawn their applications, were rejected or have been refused registration.

 The applicant should carefully consider the nature of the products and applicable regulations. For example, whether the products may be considered as a collective investment scheme, a derivative or a security.

 To carry on relevant cryptoasset activities by way of business, the applicant should demonstrate an understanding of the UK AML registration regime and/or consider seeking independent legal/compliance advice as part of preparing an application.

The cryptoassets business, based in the UK or overseas, that intends to market to UK consumers will be expected to lawfully communicate their promotions in line with UK financial promotion rules for cryptoassets. 

The MLRO/Nominated Officer of the applicant firm should have a sufficient understanding of cryptoasset-related technologies and be able to demonstrate that the person has adequate skills and experience to manage the particular money laundering, terrorist finance and proliferation finance risks inherent within the applicant’s business model.

It is expected that the business plan and risk management framework of the applicant adequately explain the applicant’s cryptoasset-related activities, the risks and how these are mitigated through the corresponding controls included in the methodology provided to the FCA.

An application where the applicant has an underdeveloped AML framework or a weak governance structure will stall its approval. The policies and procedures of the applicant should demonstrate, at least, how the AML framework operates on a day-to-day basis which encompasses areas such as; Business Wide Risk Assessment, Customer Risk Assessment, Due Diligence, Screening, Transaction Monitoring, Suspicious Activity Reporting and Training.

Part II to follow...leave your comments or contact us if we can help.

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