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Cryptoasset Business: FCA Registration Requirements & Fees
CP 19/29: Registration &Fee Requirements for Cryptoasset Businesses Announced
21st October 2019
Last week the FCA published a consultation paper related to Cryptoassets Registration and Fee Requirements.
CP19/29, entitled “Recovery of costs of supervising cryptoassets business under the proposed anti-money laundering regulations: fee proposals” aimed to set out that cryptoassets businesses must:
This consultation paper (CP19/29) is part of the Fifth Money Laundering Directive (5MLD) that will be implemented by amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 – often just referred to as the Money Laundering Regulations or MLR.
Whilst HM Treasury are still deciding which cryptoassets activities will be included within the scope of the MLRs and constitute cryptoassets businesses, the FCA assumes for CP/29 that the definition will apply to:
The consultation sets out key dates in relation to the proposed new requirements, the most important of these being 10 January 2020.
When a Cryptoasset Business applies to become registered with the FCA they must be able to demonstrate that they:
The FCA is currently proposing a registration fee of £5000, although this amount is to be consulted upon further.
It should also be noted that a decision on an application will not be made until the registration fee is paid in full.
Alongside the registration fee, the FCA is proposing ongoing annual fees for Cryptoasset Businesses that will be based upon the income arising from the cryptoassets business, currently proposed as a minimum of £1,000, though again this amount is to be consulted upon further.
The FCA’s Consultation closes on 11 November 2019 with respect to the registration fee, with feedback expected to be published in December 2019.
In respect of periodic fees, the consultation will close on 10 December 2019, after which the FCA is expected to make comment in relation to these in its Fee-rates paper published in April 2020.
Cryptoasset Businesses will need to ensure they are prepared for when the registration process starts and will also need to prepare suitable AML and CTF policies and procedures before completing and submitting their applications for FCA registration.
These business should also prepare themselves for a greater level of scrutiny going forward, particularly in relation to their AML/CTF processes and policies.
It would be advisable for existing Cryptoasset Businesses to start preparing their applications ready for submission sooner next year rather than later to ensure that the business can continue to function without any delay, since firms will not be able to operate until approval has been granted once the deadline has passed.
If you believe your business will be affected by the new regulations and would like any support or assistance in preparing your AML/CTF policies and procedures or your application for the FCA we would be pleased to support you. Simply drop us a line and we would be happy to discuss how we can help.
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