Friday, July 19, 2024

The U.K.’s Financial Conduct Authority (FCA) is designing prudential requirements for firms carrying out crypto activities.

The regulator, which is in charge of maintaining a registry of crypto firms approved for operations under the country’s anti-money laundering requirements, will also consult on prudential rules for companies engaged in crypto activities once the “Treasury and Parliament bring those activities under our regulation,” the regulator said in its annual report published Thursday.

The FCA did not immediately respond to a CoinDesk request for comment on the timeline for receiving regulatory powers.

The regulator already has a prudential regime for investment firms like fund managers, asset managers and trading firms that are based in the U.K. The regime requires firms to assess capital adequacy and risk to identify potential harm to investors and provide appropriate resources to mitigate harm.

Last year, the FCA put out a notice for firms with exposure to crypto companies, urging them to “have appropriate systems and controls to counter the risk of being misused for financial crime,” and review if the firms they work with are registered crypto companies.

The FCA, which was approved for a host of new powers under a recently passed financial markets bill, stands to be the U.K.’s key crypto watchdog as the country explores its ambition to be a global hub for the sector.

CoinDesk has reached out to the FCA for further comment.

Read more: UK Banking Regulator to Propose Rules on Issuing, Holding Crypto

Edited by Sandali Handagama.

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