UK Treasury Proposes Stricter Regulations for Cryptocurrency Firms

According to PANews, the UK Treasury has released a draft proposal for revising current anti-money laundering regulations, aiming to address evolving risks and tighten requirements for cryptocurrency businesses. The proposal seeks to establish a more risk-oriented and proportionate system to combat financial crime, while ensuring practicality for the industry. The government also plans to enhance industry guidance on anti-money laundering and counter-terrorism financing compliance, and issue separate guidance on using digital identity verification for these purposes. The new draft introduces several changes for cryptocurrency firms. The UK Financial Conduct Authority will implement a broader 'fit and proper' test for company controllers, replacing the current beneficial owner test to ensure regulation covers complex ownership structures. Other provisions will lower the notification threshold for changes in control from 25% to 10%, aligning with the Financial Services and Markets Act (FSMA) framework. This means any party acquiring 10% or more equity or exerting significant influence must notify the UK Financial Conduct Authority. Additionally, the draft includes revisions on customer due diligence, trust registration, and restrictions on correspondent banking, along with technical updates such as converting threshold amounts from euros to pounds. The UK Treasury is seeking feedback on the draft proposal, with a deadline of September 30. The finalized regulations are expected to be submitted to Parliament for review in early 2026.