LONDON—The United Kingdom’s Treasury has proposed changes to the country’s anti-money laundering framework, expanding the regime to capture a broader range of digital asset activities, including non-fungible token (NFT) issuance, according to a new report.
CoinGeek reported that the U.K.’s Treasury’s consultation paper delved into improving the effectiveness of the country’s Money Laundering Regulations 2017 (MLRs). It also discussed how to best integrate the MLRs with the Financial Services and Markets Act 2000 (FSMA), the law that gives the Financial Conduct Authority (FCA) jurisdiction over financial institutions.
The FCA’s supervisory rules are duplicated under the two regimes, according to the Treasury. Specifically, digital asset firms must seek fresh registration with the agency under the MLRs, even if they are FSMA-authorized. This duplication was among the challenges that participants in the government’s Digital Securities Sandbox last year raised, CoinGeek said.
What’s Being Proposed
To address the issue, the Treasury is proposing that virtual asset service providers (VASPs) only need FSMA authorization to engage in digital asset businesses. This will also apply to firms involved in other financial services that wish to delve into “crypto.”
CoinGeek noted the paper further proposes expanding the net to include firms dealing in NFTs. Currently, NFTs that may not be used for any financial services fall outside the FSMA regime. NFT issuers “will still need to be registered and supervised by the FCA for anti-money laundering and counter-terrorist financing purposes,” the paper states.
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