From 10 January 2020, the FCA became the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor for crypto firms, covering firms that exchange money to and from crypto assets and those that safeguard their customers crypto assets.
This requirement is related to the Fifth Anti-Money Laundering Directive (Directive (EU) 2018/843). The Directive is the first EU legislation regulating crypto which obliges the EU Member States to enforce fiat-to-crypto exchanges and custodian wallet providers to have appropriate procedures and policies preventing money-laundering and terrorist financing.
How to Register as a Crypto Firm
As a firm, you will need to complete and submit an online application via the FCA interface, called Connect. The FCA will ask for information about the firm and key individuals that will take part in the business.
What Information is required from you
Considering this is a new area of regulation for the FCA and its staff need to understand the business models relating to Crypto, there are significantly more documents and information typically required from other business model applications.
There is a variety of documentation required from the officer, manager, and beneficial owner which includes the CV and the individuals must pass the fit and proper test. Fit and Proper will cover any previous convictions, penalty notices, compliance with money laundering and terrorism, honesty and integrity, skills and experience, and prior disciplinary history.
Please note the individual CV's do not need to be glamorous but cover at least the last 3-5 years of employment.
An up to date business plan that can be utilized to elaborate further as to why you are seeking authorisation. Without confusing matters significantly or providing a thorough list, you will also need at least the below:
Programme of operations on the specific cryptoasset activities
Outsourcing plan/ agreements
Systems and controls
Owners (i.e CV) information
Governance arrangements and internal control framework
Anti-Money Laundering/Counter-Terrorist Finance framework and risk assessment
Business-wide risk assessment: with monitoring and mitigation policy
Cryptoassset public keys/wallet addresses
Due diligence processes and procedures
Record-keeping and recording procedures.
Business continuity plan.
Budget forecasts and financials for the first three financial years
Please wait for Part 2 which explains the fees, regulatory activity, and key items to note as a crypto firm.
In the meantime, do feel free to reach out to MEMA for further clarification on any of the above.