UK Proposes Stricter Anti-Money Laundering Regulations for Crypto Sector

The UK Treasury has unveiled draft legislation to strengthen anti-money laundering (AML) oversight of cryptocurrency firms, targeting ownership structures and banking relationships. The proposed rules aim to close regulatory gaps while maintaining operational continuity for compliant businesses.

Regulators will now scrutinize all individuals exercising control over crypto firms, not just beneficial owners. The 'fit and proper' assessment threshold drops significantly from 25% to 10% ownership stakes, aligning crypto with traditional finance standards. This grants authorities earlier intervention capabilities against potential risks.

Correspondent banking relationships face heightened due diligence requirements, particularly for overseas partners. The measures explicitly prohibit dealings with shell banks, seeking to fortify the connection between digital asset businesses and conventional financial networks.