UK Crypto Exchanges Pose Low Money Laundering Risk, Says Global Watchdog

Crypto exchanges in the U.K. pose a “low” risk for money laundering and terrorist financing, says a report from the Financial Action Task Force.

AccessTimeIconDec 11, 2018 at 9:10 a.m. UTC
Updated Sep 13, 2021 at 8:40 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Cryptocurrency exchanges in the U.K. present a "low risk" for money laundering and terrorist financing activities, according to a report published last week by the Financial Action Task Force (FATF), a global anti-money laundering policymaker.

The report states that while such activities are an “emerging risk,” there is not enough evidence yet to suggest that they are occurring through crypto exchanges.

The regulator, however, has asked the U.K. authorities to work on a plan to extend anti-money laundering and counter financing of terrorism rules in the crypto sector, as well as elsewhere, in order to tackle any potential risks.

FATF asks the U.K. to:

“Continue to develop an understanding of emerging risks (such as virtual currencies) and intelligence gaps, and take appropriate action.”

The U.K. has acknowledged that there are "inherent vulnerabilities" associated with the anonymity of digital currencies, the report says.

As a result, the nation is planning to regulate cryptocurrency exchanges under its implementation of the EU’s fifth Anti-Money Laundering Directive and monitor exchange services between cryptocurrencies and fiat, as well as wallet providers.

The report arrives in the build-up period before FATF issues guidance for global cryptocurrency regulation, expected by June 2019. The guidance will set out how nations should govern crypto exchanges, companies offering initial coin offerings (ICOs) and digital wallet providers.

That initiative comes in response to leaders from the G20 nations who had called for international coordination on the issue and last week reiterated their pledge to regulate crypto-assets.

“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed,” they stated.

The U.S. Treasury’s Office of Terrorism and Financial Intelligence also called on the international community earlier this year for stronger cryptocurrency regulations.

London image via Shutterstock 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.