Joint Statement from UK Financial Regulatory Authorities: Cryptoassets

On 11 March 2022, OFSI, the FCA and the Bank of England issued a joint statement on sanctions and the cryptoasset sector.

The statement comes amid the conflict between Russia and Ukraine to ensure all firms are enforcing sanctions and contains a summary of the legal and regulatory requirements on firms, steps that firms can take to reduce the risk of sanctions evasion via cryptoassets, and what to do if a firm suspects that it is dealing with the cryptoassets of a designated person.

The key message is that financial sanctions regulations to not differentiate between cryptoassets and other forms of assets. FCA has already alerted crypto firms to this.

The FCA has also written to regulated firms and  crypto firms in the UK reminding them of their responsibilities when it comes to ensuring sanctions are applied and warned that they will act if they see authorised financial firms supporting crypto firms that are operating illegally. Its guidance sets out what systems and controls should be addressing, and red flag indicators that suggest an increased risk of sanctions evasion.

The regulators also remind firms that where they have concerns, they should also consider whether to make a SAR (and that the NCA has published an updated guidance and glossary code document).

FIN. Team