Consultation paper issued in advance of new role as money laundering and counter terrorist supervisor for cryptoasset business in operation from January 2020
From 10 January 2020 the FCA will be the anti-money laundering and counter-terrorist financing supervisor for cryptoasset businesses (though it will not be regulating how cryptoasset businesses conduct their business with consumers) so it has published a consultation on its proposed registration arrangements and fees structure.
Some businesses that carry on cryptoasset related activity will be authorised by the FCA under the Financial Services and Markets Act (FSMA) or other regulations for non-cryptoasset related regulated activity that they undertake (for example, arranging deals in investments). Any cryptoasset related activity carried on by these businesses will not be covered by FSMA or other regulations such as the Electronic Money Regulations (unless they are using security tokens or e-money tokens).
Consequently, consumers will not have the same protections in relation to cryptoasset activity (for example, exchanging cryptoassets for government or central bank issued money, such as GBP or euros). The FCA expects cryptoasset businesses to ensure that they do not mislead their consumers as to what consumer protections apply and the status of their FCA registration.
The consultation paper sets out the FCA’s proposals for recovering the costs of this new role as it is funded entirely by fees and levies from the firms it regulates.
Cryptoasset businesses undertaking any of the activities listed below should assume that they will be supervised by the FCA and that the fees proposals will apply to them.
Cryptoasset activity (as described in 2019 Treasury consultation on 5th money laundering directive)
Chapter 3 of the consultation presents the FCA’s fees proposals for consultation:
The consultation has two end dates: 11 November 2019 for the registration fee and 10 December 2019 on periodic fees.