British regulators write new LMA rules for cryptographic companies

The UK HM Treasury has published this week a project of modifications proposed to current money laundering regulations which approach gaps and evolutionary risks, including stricter requirements for cryptographic companies.

“(The updates aim) to provide a more risk -based and proportionate regime which is robust against financial crime while remaining feasible for industry”, according to the document project.

“The government is also committed to improving sectoral guidelines on AML / CTF compliance on a range of questions and to publish separate directives on the use of digital identity verification for LMA / CTF purposes.”

The LMA and the CTF are a short-sized financial industry for whitening money laundering and counter-terrorist funding.

The press release follows a public consultation in 2024, which highlighted the weaknesses of the United Kingdom regime linked to common customer accounts, the registration of confidence, the surveillance of cryptographic companies and the challenges of reasonable diligence of customers.

The risks are significant, according to the national risk assessment report of money laundering and terrorist financing published in July. He found that the United Kingdom remains very exposed because of its great open economy.

Meanwhile, the survey on the economic crime of home 2024 estimated that 2% of British companies – 33,500 people – had experienced known or suspected money laundering from the previous year. The survey revealed that fraud, a large part of the cyber-compatible and linked to foreign players, now represents more than 43% of all crimes in England and Wales.

In this landscape, cryptographic assets are increasingly worrying. A survey on financial driving, or FCA, in 2024, revealed that 12% of British adults had cryptocurrency, and the police noted their growing role in laundering regimes, often through service providers outside the United Kingdom.

The new regulation project offers several changes for cryptographic companies. The Financial Conduct Authority will apply a broader “adjusted and appropriate” test to business controllers, replacing the current test of beneficial owners, to guarantee surveillance capture of complex property structures.

Other provisions will reduce the modification threshold for control notifications from 25% to 10%, corresponding to the regime of the law on financial services and markets (FSMA).

This means that any party acquiring a 10% or more – or significant influence – must inform the FCA.

Additional changes cover the reasonable diligence of customers, the recording of confidence, the correspondent’s banking restrictions and the technical updates such as the conversion of the thresholds of euros into sterling.

The Treasury invites comments on the project until September 30, before finalizing the parliamentary examination regulations in early 2026.