Britain’s HM Treasury has published draft changes to the country’s anti-money laundering and counter-terrorist financing (AML/CTF) framework that would tighten oversight of crypto businesses and close existing loopholes identified in a 2024 consultation.
The proposals would replace the current beneficial owner test with a broader “fit and proper” assessment for controllers of crypto firms, designed to capture complex or opaque ownership structures. They would also lower the change-in-control notification threshold so any party acquiring 10% or more — or otherwise gaining significant influence — must notify the Financial Conduct Authority (FCA), down from the current 25%.
Other updates in the draft cover customer due diligence, trust registration, correspondent banking restrictions and technical adjustments such as converting reporting thresholds from euros to sterling. Collectively, the changes aim to make the regime more risk-based while remaining workable for industry.
The move responds to findings that the UK remains exposed to money laundering and fraud. Government reports cited in the draft include the National Risk Assessment of Money Laundering and Terrorist Financing and the Home Office’s Economic Crime Survey, which estimated that roughly 2% of UK businesses — about 33,500 — experienced known or suspected money laundering in the prior year. The FCA has also warned about crypto’s growing role in laundering schemes, noting that around 12% of UK adults held cryptoassets in 2024.
For crypto firms and compliance teams, the draft signals higher scrutiny and new obligations. Firms should expect to review ownership structures, strengthen customer due diligence, and prepare change-in-control filings at lower equity thresholds. Non-compliance could increase regulatory interventions and penalties.
The Treasury is consulting on the draft until September 30, with final regulations expected to be laid before Parliament in early 2026. Firms and stakeholders are encouraged to respond to the consultation.
Source: Decrypt. Read the original coverage for full details.