The UK Government is implementing crypto regulations and enforcing rules to prevent money laundering through cryptocurrency by expanding the financial promotions regime to include qualifying cryptoassets. The Financial Conduct Authority (FCA) will be responsible for regulating these promotions, ensuring that they are fair, clear, and not misleading.

To legally promote a qualifying cryptoasset, it must either be made or approved by an authorised firm or fall within an exemption. This shift in regulation comes as a response to concerns about controversial advertisements and high-profile firm failures in the cryptoasset space.

The government will introduce a statutory instrument for the cryptoasset financial promotions regime when parliamentary time allows. A four-month implementation period (reduced from six months) will follow the introduction of the regulations. During this time, firms should prepare to meet the new regulatory requirements.

For businesses that are registered with the FCA under the anti-money laundering regime but are not authorised firms, a temporary, limited exemption will be in place. This exemption aims to allow these businesses to continue promoting their own qualifying cryptoassets in the absence of enough authorised firms in the market.

It is crucial for unauthorised firms currently promoting in-scope cryptoassets to seek legal advice and develop plans for when the exemption expires. The FCA is expected to provide further rules and guidance on how it will supervise and enforce the expansion of the financial promotions regime in 2023.

The intersection of technology and finance is becoming more common, and with the growth of cryptocurrencies and blockchain, the need for a balanced and well-regulated environment is evident. The future of finance will likely involve further integration of digital currencies, blockchain technology, and other innovative financial solutions. It is essential for governments and regulators to maintain a balanced approach that encourages innovation while protecting consumers and investors from potential risks.

The government’s plan of action includes the implementation of the Financial Action Task Force’s Travel Rule and the passing of the Economic Crime and Corporate Transparency Bill by the end of the fourth quarter of 2023. Furthermore, the government aims to improve communication between the FCA and crypto firms in the second quarter of 2024.

Verify 365 can help verify the source of funds for cryptocurrency transactions by providing a comprehensive and reliable due diligence solution. Although Verify 365 is not specifically tailored for crypto assets, its functionalities can be applied to the crypto industry to enhance transparency and compliance. Here’s how Verify 365 can assist in verifying the source of funds for cryptocurrency transactions:

  1. Access to digital bank statements: Verify 365 uses Open Banking to access digital bank statements of customers securely. By analyzing these statements, businesses can gain insights into the customers’ financial transactions, including their interactions with cryptocurrency exchanges, purchase and sale of cryptocurrencies, and any suspicious patterns that might indicate illicit activities.
  2. Identity verification: Verify 365 can help confirm the identity of customers by cross-referencing their personal information with the data available in their digital bank statements. This verification process reduces the risk of identity theft and ensures that the customers are who they claim to be. In the context of cryptocurrency transactions, this helps businesses confirm that the funds being invested in crypto assets are indeed coming from the verified customer.
  3. Transaction monitoring: Verify 365 can monitor customer transactions to identify patterns and trends that might indicate potential risks, such as money laundering or terrorist financing. By continuously monitoring transactions, businesses can stay alert to any unusual activities related to cryptocurrency investments and take appropriate actions to mitigate risks and ensure compliance with regulatory requirements.
  4. Risk assessment: Verify 365 allows businesses to assess the risk level of their customers based on their financial transactions, including those related to cryptocurrencies. This risk assessment can help businesses develop appropriate measures to manage their exposure to potential risks, such as implementing enhanced due diligence procedures for high-risk customers or reporting suspicious transactions to relevant authorities.
  5. Regulatory compliance: Verify 365 can help businesses maintain compliance with regulatory requirements, such as anti-money laundering (AML) and know-your-customer (KYC) regulations, by providing a comprehensive solution to verify the source of funds for cryptocurrency transactions. This compliance support not only reduces the risk of penalties and fines but also contributes to the overall integrity and stability of the financial system.


Mev Dzihic, CTO at Verify 365, commented on the application of their platform to the property sector and the growing importance of addressing crypto-related risks, saying, “As the property sector increasingly intersects with the world of cryptocurrency, businesses must adapt to new challenges in mitigating risks and ensuring compliance with regulatory requirements. Verify 365 provides an efficient, secure, and comprehensive solution that empowers businesses in the property sector to conduct thorough due diligence, verify the source of funds, and monitor transactions effectively, including those involving cryptocurrencies. By utilizing our platform, property professionals can better navigate the complexities of the industry, manage risks associated with both traditional and crypto transactions, and ultimately contribute to the transparency and integrity of the property market.”

By leveraging Verify 365’s technology, businesses can contribute to these regulatory efforts by conducting comprehensive due diligence, ensuring compliance with regulatory requirements, and reducing the risk of fraud and illicit activities. The integration of Verify 365’s platform and Open Banking digital bank statements offers businesses a powerful tool to stay ahead of the evolving regulatory landscape and contribute to the UK’s ambition of becoming a global hub for crypto assets and innovation.