The cryptocurrency industry is now confronted with a restrictive change. Just recently in a compliance briefing with Elliptic London, a discussion was done on how industry stakeholders can create a thriving compliance operation despite the regulatory flux in and surrounding the UK. The briefing was participated by Barclays VP for financial crime risk, Marcus Peckham; independent AML/CFT expert, Denisse Rudich, Elliptic’s David Carlisle, and ComplyAdvantage’s head of financial crime, Livia Benisty.
Ms. Benisty says, “The latest regulatory guidance for the crypto industry has only started. The discussion included on whether domestic regulations will go beyond international guidance and may have the need for its members to prepare.”
The briefing went on just immediately after the UK’s HM Treasury introduced its official consultation about 5AMLD. It was said to be participated with the strongest compliance offices from the banking and crypto sectors. Therefore, this article will make you find the three important observations gathered from the said discussion:
- Crypto Businesses Needing Future Proofing of their Compliance Operations
The HM Treasury consultation may recommend that UK can engage in a broad regulatory framework that is beyond the 5AMLD requirements and is also applicable to a wide variety of crypto platforms and activities. As discussed in the briefing, UK will never allow the usage of crypto for illicit activities. The government is strict and vigilant when the cryptocurrency is used for money laundering and terrorist financing.
The panelists and participants all agreed that the regulation in and surrounding the UK will continue to broaden in time and its clarity will remain difficult to acquire. According to David Carlisle, Elliptic’s head of community, the largest possible challenge that compliance officers can see in the crypto industry is having the regulation modified once it’s been adopted.
It is then concluded that crypto trading, ICO issuers, brokers, and other platforms will never take more time for emerging the regulatory clarity before the AML systems are implemented. If AML transaction monitoring tools and other financial crime controls are positioned well, the new regulation will future proof the operations to assure its resiliency and success despite the regulatory change.
- Compliance Officers Must Consider Proactively the Financial Crime Risks
UK regulators are carefully and thoroughly considering the risks involved in crypto space. The discussion on HM Treasury’s 5AMLD claims that the risk profile of crypto assets are changing fast, which reflect the fast nature of this sector.
Compliance officers need to implement the right tools for regulatory compliance in both banking and crypto sectors. They need to determine exposure to typologies and risks, like some forms of criminal activities.
There is a need to perform thorough risk evaluation of what they offer that will involve a threat to criminal activities using cryptocurrencies. They need to create controls to combat such risks before they come to reality.
Consider the Importance of Partnership and Transparency
The crypto space needs to be regulated to present complicated technical concerns that make possible challenges for regulators, crypto businesses and financial institutions. The HM Treasury’s consultation has created disputable queries, such as having producers of open-source software implement AML requisites. This may need thorough debate and examination.
To conclude, it is therefore crucial for all stakeholders to share information, experiences and perspectives in an open and transparent way to ensure the regulation is designed to protect against possible risks without preventing innovation.
Information about how to analyze crypto regulations can be researched and derived using the Net. Just check for organizations working for the crypto sector. They are always staying ahead for a quick-changing regulatory development.