Michael Harris, Director of Financial Crime Compliance at LexisNexis® Risk Solutions, comments on the new cryptocurrency trade body CryptoUK, and what this means for the regulation of the sector:
“A trade body is certainly a step in the right direction when it comes to the regulation of cryptocurrencies, but is really only the tip of the iceberg.
Digital currencies are an attractive vehicle for financial crime because of their relative opacity. Due to the highly anonymised nature of the technology, it is possible to launder huge sums of money around the crypto-sphere, cross jurisdictional borders without detection, and even evade international sanctions at the same time.
As a self-regulating body, CryptoUK is making its members sign a code of conduct to ensure greater due diligence against illegal activities. Whilst this is a positive move, the FCA and government must ensure that it is held to the same account as other financial services firms when it comes to anti-money laundering compliance and regulation.
The government, regulatory authorities and the wider financial services sector must work together with CryptoUK to regulate this controversial sector, and establish if more needs to be done to prevent bad actors using these as routes to fund financial crime.”