LONDON—The Financial Conduct Authority (FCA), which regulates U.K. businesses that offer services for digital assets, has sent written evidence to the U.K. Treasury Committee that suggests 85% of U.K. companies requesting registration of digital assets did not adhere to minimum AML requirements.
“On Dec. 7, the FCA testified before the committee and promised in writing to address some of the committee’s concerns. The committee has now issued a written follow-up. According to FCA reports, only 5% of companies that applied for FCA authorization were approved on the first attempt,” Business 2 Community said.
The FCA also revealed that 85% of applicants were turned down because they did not meet the minimum of anti-money laundering and anti-terrorist funding requirements.
As part of the registration process, FCA discovered flaws in critical controls such as customer investigative work, risk assessments, transactions, active monitoring, accountability, and management information, according to the report.
Failure to Provide Proof
“Many times, key personnel failed to provide proof that they met the registration requirements because they lacked the necessary knowledge, abilities, and experience. Some businesses that are deregistered will resubmit their applications if they believe they can meet FCA criteria,” Business 2 Community said.
When the FCA discovered suspected financial criminality or direct connections to criminal organizations, it referred them to law enforcement. Some of the ongoing investigations are still in progress, Business 2 Community noted.
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