The financial regulator in the United Kingdom, the Financial Conduct Authority (‘FCA’), has issued a consultation paper on the ‘Recovery of costs of supervising cryptoasset business under the proposed anti-money laundering regulations: fee proposals’ (CP19/29).
CP19/29 is part of the transposition of the EU 5th Anti Money Laundering Directive (5MLD), which sets out requirements for cryptoasset businesses which will be implemented through amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).
The FCA will supervise cryptoasset businesses for the purposes of anti-money laundering and counter-terrorist financing (AML/CFT) as of 10th January 2020. Thus, all UK cryptoasset business will need to register with the FCA which will be responsible for AML/CTF registration and supervision.
Although the Treasury has not yet confirmed which activities will be covered; cryptoasset businesses providing any of the activities listed hereunder will presumably be supervised by the FCA and subject to pay the stipulated fees:
UK cryptoasset businesses are required to register with the FCA as of 10th January 2020. This obligation effectively means that:
As of the 10th January 2020, all cryptoasset businesses will be supervised and subject to enforcement sanctions by the FCA, even if they fail to register.
In order to register, a business must complete an online application form, provide all requested information and pay the registration fee. FCA’s assessment will consider whether businesses can demonstrate the following:
The proposed registration fee is £5,000, however, this sum is subject to further consultation. The FCA will also set ongoing fees based on the income received by the cryptoasset business, with the proposed minimum fee set at £1,000, subject to further consultation.
The FCA is accepting responses to its consultation paper regarding any comments on the proposed registration fee of £5,000 and the proposals on periodic fees including the minimum fee threshold. Following this consultation period, the FCA will set the registration fee which will be published in a Handbook Notice in December. Feedback will then be provided on the periodic fees in April 2020, with a policy statement being finalised in June 2020.